THE  LIBRARY 
OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 
GIFT  OF 


CHARLES  GOLDRING 


CiK'^affl'*.       Lws,  ■jfj-fu"f»s,«fc 


BANK  ACT  OF  CALIFORNIA 


INCLUDING  1921  AMENDMENTS 


COMPILED  BY 


Blyth.  Witter  &.  Co. 


MERCHANTS  EXCHANGE 

San  Francisco 


NEW  YORK  LOS  ANGELES  SEATTLE 


s 

C45L 


COPTRIGHT  1921 

BLYTH,  WITTER  &.  COMPANY 

Merchants  Exchange,  San  Francisco 
newyork-los  angeles-seattle 


FOREWORD 


In  submitting  our  revised  edition  of  the  Bank  Act  of 
California  to  embody  the  amendments  adopted  at  the  1 92 1 
Session  of  the  Legislature,  we  have  been  guided  by  the  same 
principles  observed  in  the  publication  of  the  original  edition 
two  years  ago,  namely,  to  prepare  a  volume  easy  of  refer- 
ence and  convenient  in  form. 

Immediately  following  the  amended  sections,  brief  pub- 
lishers' notes  indicate  the  effect  of  the  amendment,  thus  ob- 
viating the  necessity  of  comparing  the  present  with  the  pre- 
vious reading. 

We  acknowledge  the  valued  assistance  of  the  California 
Bankers'  Association  in  providing  a  synopsis  of  the  amend- 
ments, as  well  as  the  painstaking  work  of  Robert  C.  Young, 
of  the  San  Francisco  Bar. 

Blyth,  Witter  &  Co. 


July,  1921. 


TABLE  OF  CONTENTS 

ARTICLE  I. 

General    Provisions    Sections  1-    58,    inclusive 

ARTICLE  II. 

Savings    Banks    Sections      60-    70,    inclusive 

ARTICLE  III. 

Commercial   Banks    Sections      80-    85,    inclusive 

ARTICLE  IV. 

Trust    Companies    Sections      90-107,    inclusive 

ARTICLE  V. 

State    Banking    Department Sections    120-147,    inclusive 


APPENDIX 

Text  of  certain   laws   referred  to   in  the  Bank  Act,   and  other 
banking  lav^s  Pages    177-212,    inclusive 

COMPLETE  CROSS   INDEX See  last  pages 


Bank  Act  of  California 

AN  ACT  TO  DEFINE  AND  REGULATE  THE  BUSINESS  OF 
BANKING 

The  'People  of  the  State  of  California,  Represented  in  Senate  and  cAssembly 
1)0  €nact  as  Follows: 


ARTICLE  I. 
GENERAL  PROVISIONS. 
Section    1.     This  act  shall  be  known  as  the  "bank  act,"  Act  named  "bank 

act. 

and  shall  be  applicable  to  all  corporations  specified  in  the 
next  section  and  to  such  other  corporations  as  shall  sub- 
ject themselves  to  special  provisions  and  sections  thereof, 
and  to  such  other  persons,  associations,  copartnerships  or 
corporations  who  shall,  by  violating  any  of  its  provisions, 
become  subject  to  the  penalties  provided  therein. 

[Publishers   note,   re   Section   1,    as   amended  1921: 

Amendment    adds,    to    those    to    whom    the    act    applies,     "such    other    corpo- 
rations as  shall  subject  themselves  to  special  provisions  and  sections  thereof."] 

Section    2.    The  word  "bank"  as  used  in  this  act  shall  "Bank-  defined. 
be  construed  to  mean  any  incorporated  banking  institu- 
tion which  shall  have  been  incorporated  to  conduct  the 
business  of  receiving  money  on  deposit,  or  transacting  a 
trust  business  as  herein  defined.     The  soliciting,  receiving  what  deemed  com- 

,  ..  •        ^        M.  J  'i.  mercial  or  savings 

or  accepting  or  money  or  its  equivalent  on  deposit  as  a  bank  business. 
regular  business  shall  be  deemed  to  be  doing  a  commer- 
cial or  savings  bank  business  whether  such  deposit  is  made 
subject  to  check  or  is  evidenced  by  a  certificate  of  de- 
posit, a  pass  book,  a  note,  a  receipt  or  other  writing; 
provided,  that  nothing  herein  shall  apply  to  or  include 
money  or  its  equivalent  left  in  escrow  or  left  with  an 
agent,  pending  investment  in  real  estate  or  securities  for 


§  2-5  BLYTH.  WITTER  &  CO. 

or  on  account  of  his  principal.  It  shall  be  unlawful  for 
any  corporation,  partnership,  firm  or  individual  to  engage 

Transacting  banking  _  ii.i.  .1.1.  =«» 

business  otherwise  in  or  transact  a  banking  business  within  this  state  except 

than  by  means  of  •  1    i  •         1    r 

banking  corporation—  by  means  of  a  Corporation  duly  organized  for  such  pur- 
pose.    Banks  are  divided  into  the  following  classes: 

(a)  Savings  banks; 

(b)  Commercial  banks;  and 

(c)  Trust  companies. 

Method  of  organizing        Section    3.      Corporations  may  be   organized   by  any 

banking  corporations.  |  ^  ,  .   1  .  ».L  j.L 

number  or  natural  persons,  not  less  m  any  case  trian  triree, 
under  the  laws  of  this  state  to  conduct,  as  provided  in  this 
act,  and  not  otherwise,  any  one  or  more  or  all  of  the 
businesses  mentioned  in  divisions  (a),  (b),  and  (c)  of 
section  two,  of  this  act. 

"Savings  bank"  Section  4.  The  term  "savings  bank,"  when  used  in 
this  act,  means  a  bank  organized  for  the  purpose  of  ac- 
cumulating and  loaning  the  funds  of  its  members,  stock- 
holders, and  depositors,  and  which  may  loan  and  invest 
the  funds  thereof,  receive  deposits  of  money;  loan,  in- 
vest and  collect  the  same  with  interest;  and  may  repay 
depositors  with  or  without  interest,  and  having  power  to 
invest  said  funds  in  such  property,  securities  and  obliga- 
tions as  may  be  prescribed  by  this  act;  and  to  declare 
and  pay  dividends  on  its  general  deposits,  and  a  stipulated 
rate  of  interest  on  deposits  made  for  a  stated  period  or 
upon  special  terms. 

"Commercial  bank"  Section  5.  The  term  "commercial  bank,"  when  used 
in  this  act,  means  any  bank  authorized  by  law  to  receive 
deposits  of  money,  deal  in  commercial  paper  or  to  make 
loans  thereon,  and  to  lend  money  on  real  or  personal 
property,  and  to  discount  bills,  notes  or  other  commercizJ 
paper,  and  to  buy  and  sell,  and  advertise  for  purchase  or 
sale,  such  securities  as  are  permissible  for  investment  by 
commercial  banks,  gold  and  silver  bullion,  or  foreign 
Commercial  bank  coins   or   bills   of   exchange;    provided,    any   commercial 

insurance  company,  bank  located  and  doing  business  in  any  place  the  popula- 

112] 


GENERAL  PROVISIONS §5-7 


tion  of  which  does  not  exceed  five  thousand  persons,  as 
shown  by  the  last  preceding  federal  census,  or  any  subse- 
quent census  compiled  and  certified  under  any  law  of  this 
state,  may,  under  such  rules  and  regulations  as  may  be 
prescribed  by  the  superintendent  of  banks,  act  as  the 
agent  for  any  fire,  life,  or  other  insurance  company  auth- 
orized by  the  authorities  of  the  State  of  California  to  do 
business  in  this  state,  by  soliciting  and  selling  insurance 
and  collecting  premiums  on  policies  issued  by  such  com- 
pany; and  may  receive  for  services  so  rendered  such  fees 
or  commissions  as  may  be  agreed  upon  between  the  said 
bank  and  the  insurance  company  for  which  it  may  act  as 
agent ;  and  may  also  act  as  the  broker  or  agent  for  others  fg^ate^^^nd'foan '^^^^ 
in  making  or  procuring  loans  on  real  estate  located  within  iJ^oker. 
one  hundred  miles  of  the  place  in  which  said  bank  may 
be  located,  receiving  for  such  services  a  reasonable  fee 
or  commission;  provided,  however,  that  no  such  bank  or^assu^Vs^uTh  loana 
shall  in  any  case  guarantee  either  the  principal  or  interest  "^g^fJ^^JI*  °^ 
of  any  such  loans  or  assume  or  guarantee  the  payment  of 
any  premium  on  insurance  policies  issued  through  its 
agency  by  its  principal;  and  provided,  further,  that  said 
bank  shall  not  guarantee  the  truth  of  any  statement  made 
by  an  assured  in  filing  his  application  for  insurance, 

[Publishers'   note,   re   Section  5,   as  amended  1921: 

This  amendment  authorizes  a  bank,  in  addition  to  acting  as  insurance  agent, 
to  "act  as  the  broker  or  agent  for  others  in  making  or  procuring  loans  on  real  estate 
located  within  one  hundred  miles  of  the  place  in  which  said  bank  may  be  located, 
receiving  for  such  services  a  reasonable  fee  or  commission."  The  bank  shall  not 
in  any  case   "guarantee  the  principal  or  interest  of  any  such  loans."] 

Section  6.  The  term  "trust  company,"  when  used  in  Zl^^l'"""^"''^" 
this  act,  means  any  corporation  which  is  incorporated 
under  the  laws  of  this  state  for  the  purpose  of  conducting 
the  business  of  acting  as  executor,  administrator,  guardian 
of  estates,  assignee,  receiver,  depositary  or  trustee  under 
appointment  of  any  court  or  by  authority  of  any  law  of 
this  state,  or  as  trustee  for  any  purpose  permitted  by  law. 

Section    7.      No    foreign   corporation   shall    transact   a  p°g^g^"i3°t?3°[o"°°*" 
banking  business  in  this  state  without  first  complying  with  |^*th?s'siate^""''''' 
all  the  requirements  of  the  laws  of  this  state  relative  to 

[13] 


§  7  BLYTH.  WITTER  &  CO. 

banks  as  defined  in  this  act,  and  without  having  assigned 
to  its  business  in  this  state  the  amount  of  paid-up  capital 
and  surplus  required  by  this  act  for  the  transaction  of 
such  business  within  this  state.  No  foreign  banking  cor- 
poration shall  transact  business  in  this  state  until  such 
corporation  has  made  the  assignment  of  capital  required 
by  this  section  and  has  received  a  certificate  from  the 
superintendent  of  banks;  provided,  that  a  foreign  bank- 
Hereafter  not  to  re-  fng  corporation  shall  not  be  permitted  to  accept  deposits 

ceive  deposits.        «=>  i^  x-  r-  r 

(Exception)  of  money  in  this  state  but  may  receive  a  certificate  from 
the  superintendent  of  banks  to  transact  in  this  state  only 
But  may  transact  the  business  of  buying  or  selling,  paying  or  collecting  bills 
business,  of  exchange,  or  of  issuing  letters  of  credit  or  of  receiving 
money  for  transmission  or  transmitting  the  same  by  draft, 
check,  cable  or  otherwise,  or  of  making  loans;  and  pro- 
vided, further,  that  those  foreign  banking  corporations 
that  now  have  power  to  do  a  banking  business  in  this 
state  and  which  now  receive  deposits  of  money  shall  be 
permitted  to  continue  to  accept  money  on  deposit.  Any 
foreign  banking  corporation  transacting  business  in  this 
state  shall  become  subject  to  the  supervision  of  the  state 
superintendent  of  banks.  Every  foreign  banking  corpora- 
Subject  to  statue  jJqj^^  including  those  which  were  on  January  second, 
nineteen  hundred  thirteen,  transacting  business  in  this 
state,  which  receives  any  deposits  or  transacts  any  other 
banking  business  or  transacts  its  business  in  such  a  man- 
ner as  might  lead  the  public  to  believe  that  its  business  is 
that  of  a  bank  shall  conduct  all  its  business  in  accordance 
with  the  statutes  governing  incorporated  banking  institu- 
tions organized  under  the  laws  of  this  state.  The  capital 
bus^inei's1n^M^sfat'e°  ^^  ^^y  ^^^^  foreign  banking  corporation  assigned  to  its 
**'^'  ^sepa^aTe!  ^usiness  in  this  state  and  all  funds  and  deposits  of  money 
received  by  any  such  corporation  in  this  state  or  for  or  in 
connection  with  its  business  in  this  state  and  all  accounts 
and  transactions  of  said  business  transacted  by  any  such 
foreign  corporation  in  this  state  shall  be  kept  separate 
and  apart  from  the  general  business,  assets  and  accounts 

[14] 


GENERAL  PROVISIONS  §  7 


of  such  foreign  corporation  in  the  same  manner  as  if  the 
business  of  such  foreign  corporation  conducted  within 
this  state  was  that  of  a  separate  and  independent  corpora- 
tion organized  under  the  laws  of  this  state  for  the  pur- 
pose of  doing  a  banking  business  and  all  of  the  pro- 
visions of  this  act  affecting  investments,  loans  of  money, 
receiving  deposits  and  conducting  business  in  any  respect  provisions  of  Act 

,      ,,  ,  ,  ,  ,  1  •  1  -i    1      •  t     affecting  investments, 

shall  be  deemed  to  apply  to  such  assigned  capital,  invest-  deposits,  etc.,  apply 

■  ,  .  f         f  11'  •        tL       to  assigned  capital. 

ments,  loans,  deposits,  assets,  runds  and  business  in  trie 
same  manner  as  if  such  assigned  capital,  investments, 
loans,  deposits,  assets,  funds  and  business  were  that  of 
such  separate  and  independent  corporation;  provided, 
that  loans  may  be  made  by  any  such  foreign  corporation  Loans  made  by  for- 

.   ,  '11  1  "  eign  corporations — 

based  on  its  entire  paid-up  capital  and  surplus  in  case  their  basis. 
such  foreign  corporation  shall  have  assigned  to  its  busi- 
ness in  this  state  a  paid-up  capital  and  surplus  as  above 
provided  equal  to  tw^enty  per  centum  of  the  deposit  lia- 
bility of  such  branch  agency  or  office  to  residents  of  this 
state.  Such  funds  and  investments  or  loans  thereof  shall  be 
appropriated  solely  to  the  security  and  payment  of  such 
deposits,  and  shall  not  be  mingled  with  the  investments 
of  the  capital  stock  or  other  money  or  property  belong- 
ing to  such  corporation  or  be  liable  for  the  debts  or  obli- 
gations thereof.      All  income  received   from  the  invest-  income  from  invest- 

.,  iri  1         nient  of  funds — how 

ment  of  such  funds  over  and  above  such  funds  as  may  be  applied. 

paid  to  depositors  as  interest  or  shall  be  carried  to  the 

surplus  fund,   as  provided  in  section  twenty-one  of  this 

act,  shall  accrue  as  profits  to  the  corporation  and  may  be 

transferred  to  its  general  funds.    No  such  foreign  corpora-  Further  prerequisites 

I  I   .  ,         .  .         1   .  .1    to  doing  business — 

tion  shall  transact  any  banking  business  in  this  state  until  Filing  appointment 

.  .  rii°^  Supt.  as  attorney, 

it  has  executed  and  filed  with  the  superintendent  of  banks  etc. 
a  written  instrument  appointing  such  superintendent  or 
his  successor  in  office,  its  true  and  lawful  attorney,  upon 
whom  all  process  issued  by  authority  of  or  under  any  law 
of  this  state  may  be  served,  with  the  same  effect  as  if 
such  corporation  was  formed  under  the  laws  of  this  state 
and  had  been  lawfully  served  with  process  therein.    Such 

[151 


§  7  BLYTH,  WITTER  &  CO. 

service  upon  such  attorney  shall  be  deemed  personal 
service  on  such  corporation.  The  superintendent  of  banks 
shall  forthwith  forward  by  mail,  postage  prepaid,  a  copy 
of  every  process  served  upon  him  under  the  provisions  of 
this  section,  addressed  to  the  manager  or  agent  of  such 
corporation,  at  its  principal  place  of  business  in  this  state. 
For  each  copy  of  process,  the  superintendent  of  banks 
shall  collect  the  sum  of  two  dollars,  which  shall  be  paid 
by  the  plaintiff  or  moving  party  at  the  time  of  the  serv- 
ice, to  be  recovered  by  him  as  a  part  of  his  taxable  costs 

Foreign  corporation  [{  ^g  succeed  in  the  suit  or  proceeding.     No  foreign  cor- 
net to  have  any  trust  r  o  e> 

company  powers,  or  poratiou  shall  have  or  exercise  in  this  state  the  power  to 

powers  specified  m  ^ 

Sec.  6,  except  in  this  receive  deposits  of  trust  moneys,  securities  or  other  per- 

State  may  exercise  •.  ^  x- 

powers  permitted  to  sonal  property  from  any  person  or  corporation  or  any  of 

foreign  corporations 

by  Sec.  90,  and  act  the  powcrs  Specified  in  section  six  of  this  act,  nor  have  or 

as  executor  or  trus-  ..-—.,. 

tee  under  will,  maintain  an  ofnce  in  this  state  for  the  transaction  of,  or 
transact,  directly  or  indirectly,  any  such  or  similar  busi- 
ness, except  that  a  trust  company  incorporated  in  another 
state  may  have  or  exercise  in  this  state  such  powers  as  are 
permitted  to  foreign  corporations  by  the  provisions  of 
section  ninety  of  this  act  and  may  be  appointed  and  may 
accept  appointment  and  may  act  in  this  state  as  execu- 
tor of  or  trustee  under  the  last  will  and  testament  of  any 
deceased  person,  upon  giving  the  bond  required  in  such 
cases  of  individuals  unless  waived  by  the  last  will  and 
testament  making  such  appointment  and  by  taking  and 
subscribing  an  oath  for  faithful  performance  of  such 
trust  by  the  president,  vice  president,  secretary,  mianager 
or  trust  officer  of  said  corporation;  provided,  that  such 
superintendent  of  banks,  for  the  time  being,  shall  be 
attorney  of  such  foreign  corporation  qualifying  or  act- 
ing in  this  state  as  such  executor  or  trustee,  upon  whom 
process  against  such  foreign  corporation  may  be  served 
in  any  action  or  legal  proceeding  against  such  executor 
or  trustee  affecting  or  relating  to  the  estate  or  prop- 
erty represented  or  held  by  such  executor  or  trustee,  or 
any    act    or    default    of    such     foreign     corporation    in 

[161 


GENERAL  PROVISIONS  §  7 


reference    to    such    estate    or    property,    and    it    shall    be 
the   duty    of   such    foreign    corporation    so    qualifying    or 

_,.  ,  -~  (■  .,  -tJif   ForeigTi  corporation 

acting    to    hie    in    the    orhce    or    said    superintendent    or  so  acting  to  file  copy 

,  ,  r    •.  .•    1  !•    •  !.•  C    m\.       of  articles,  etc., 

banks  a  copy  or  its  articles  or  incorporation,   or  or  the  and  appointment  of 

,  .  1  ..  .•  r     J       1  -i.      Supt.  as  attorney,  etc. 

statute     chartering     such     corporation,     certined     by     its 
secretary    under    its    corporate    seal,    together    with    the 
post-office  address  of  its  home  office,  and  a  duly  executed 
appointment  of  said  superintendent  of  banks  as  its  at- 
torney to  accept  service  of  process  as  above  provided,  and 
said  superintendent  of  banks,  when  any  such  process  is 
served  upon  him,  shall  at  once  mail  the  papers  so  served 
to   the  home  office  of  such   corporation;   and   provided,  tion °ha'v1ng^Tn°state 
further,   that  no  foreign  corporation  which  may  have  or  |:r90,'etZ' to'^  ^'^ 
exercise  in  this  state  such  powers  as  are  permitted  to  for-  ^ffiee*or°soYicH  busi- 
eign  corporations  by  the  provisions  of  section  ninety  of  "rustee.*"'^''"^"'^  °' 
this  act  or  having  authority  to  act  as  executor  of  or  trustee 
under  the  last  will  and  testament  of  any  deceased  person 
shall    establish   or   maintain,    directly   or   indirectly,    any 
branch  office  or  agency  in  this  state,  or  shall  in  any  way 
solicit,  directly  or  indirectly,  any  business  as  executor  or  Penalty  for  violation. 
trustee  therein,  and  that  for  any  violation  of  this  proviso, 
the  court  having  jurisdiction  of  such  executor  or  trustee 
in  said  proceeding  may  in  its  discretion,  revoke  the  right 
of  such  foreign  corporation  thereafter  to  act  as  executor 
or  trustee  therein;  provided,  that  nothing  in  this  act  shall 
limit  or  affect  the  right  of  any  foreign  corporation  doing 
a  banking  business  in  this  state,  to  lend  within  this  state, 
moneys  of  such  corporation  which  do  not  form  a  part  of 
the  moneys,    deposits  or  assets  of  such   corporation  as- 
signed or  belonging  to  its  business  in  this  state. 

This  section  shall  not  be  construed  to  prohibit  foreign  Foreign  banking 

_       corporations  not  main- 
banking  corporations,  which  do  not  maintain  an  office  in  taining  office  here 

°  ^  _  not  prohibited  from 

this  state  for  the  transaction   of  business,    from  making  making  mortgage 

loans,  etc. 

loans  in  this  state  secured  by  mortgages  on  real  property, 
nor  from  accepting  assignments  of  mortgages  covering 
real  property  situated  in  this  state,  nor  from  making  loans 

[171 


§  7-9  BLYTH.  WITTER  &   CO. 

through  correspondents  which  are  engaged  in  the  busi- 
ness of  banking  in  this  state  under  the  laws  of  this  state. 

R&quirements  im-        Section  8.     Everv  Corporation,  at  the  time  it  appHes  for 

posed  upon  every 

corporation  applying  a  certificate  of  authority  to  do  a  banking  business,  must 

for  certificate  of  _  _  _ 

authority  to  do  a  file  w^ith  the  Superintendent  of  banks  a  certified  copy  of 

banking  business. 

its  articles  of  incorporation,  or  of  the  statute  chartering 
such  corporation,  a  certified  copy  of  its  by-law^s,  and 
also  a  certified  copy  of  all  instruments  amending  or  alter- 
ing such  articles  of  incorporation  or  charter  or  by-laws. 
Thereafter  a  certified  copy  of  each  amendment  or  certifi- 
cate designed  to  increase  or  decrease  the  capital  stock,  to 
change  the  number  of  directors,  to  amend  the  articles  of 
incorporation,  to  change  the  principal  place  of  business, 
or  the  name  of  such  corporation,  or  to  effect  any  other 
organic  change  shall  likew^ise  be  so  filed  before  such  in- 
strument takes  effect.  Each  certification  required  by  the 
provisions  of  this  section  other  than  that  of  by-laws  must 
be  by  the  secretary  of  state. 

Branch  Banks.       Section  9.      No  bank  in  this  state,    or  any  officer  or 

Prerequisites  for       _  i  z-r 

opening,  director  thereof,  shall  hereafter  open  or  keep  an  office 
other  than  its  principal  place  of  business,  without  first 
having  obtained  the  written  approval  of  the  superintend- 
ent of  banks  to  the  opening  of  such  branch  office,  which 
written  approval  may  be  given  or  withheld  in  his  discre- 
tion, and  shall  not  be  given  by  him  until  he  has  ascer- 
tained to  his  satisfaction  that  the  public  convenience  and 
advantage  will  be  promoted  by  the  opening  of  such 
Capital  required— branch  office;  provided,  that  no  bank  or  any  officer  or 
director  thereof,  shall  open  or  maintain  any  such  branch 
office  unless  the  capital  of  such  bank,  actually  paid  in, 
in  cash,  shall  exceed  the  amount  required  by  this  act  by 
the  sum  of  twenty-five  thousand  dollars  for  each  branch 
office  opened  and  maintained  in  the  place  where  its  prin- 
cipal business  is  transacted;  and  provided,  that  for  each 
"7l"'Z^Z%i^c'^  branch  office  opened  or  maintained  by  any  bank,  other 
of  business,  ^.j^^^  ^  ^^^^j^  transacting  only  the  business  described  in 

[18] 


Generally. 


For  each  branch 
other  than  trust 


GENERAL  PROVISIONS §9 

section  six  of  this  act,  in  any  place  in  this  state  other  than 
the  place  where  the  principal  business  of  such  bank  is 
transacted,  the  capital  of  such  bank,  actually  paid  in,  in 
cash,  shall  exceed  the  amount  required  by  this  act  in  the 
sum  required  by  this  act  for  every  bank  hereafter  organ- 
ized in  the  place  where  each  branch  office  is  to  be  opened 
or  maintained,  exclusive  of  the  capital  required  for  a 
trust  department;  and,  provided  also,  that  for  each  For  branch  opened 
branch  office  opened  or  maintained  by  any  corporation  of  mo"  tgagr-fnslfr- 
which  has  power  to  transact  only  such  business  as  is  de-  *"'^®  company, 
scribed  in  section  six  of  this  act  or  in  section  four  hundred 
fifty-three  x  of  the  Civil  Code,  in  any  place  in  this  state 
other  than  the  place  where  the  principal  business  of  such 
corporation  is  transacted,  the  capital  of  such  corporation, 
actually  paid  in,  in  cash,  shall  exceed  the  amount  re- 
quired by  this  act  in  the  sum  of  twenty-five  thousand  dol- 
lars; and  provided,  further,  that  no  branch  office  may  be 
discontinued  without  the  previous  written  approval  of 
the  superintendent  of  banks. 

Every  bank,  before  it  opens  a  branch  office,  shall  ob-  certificate  required 
tain  the  certificate  of  authority  of  the  superintendent  of  '"'  "^'""'"^  ''"°^^- 
banks  for  the  opening  of  each  of  said  branch  offices.    The 
applicant  shall  pay  for  such  certificate  a  fee  of  fifty  dol- 
lars; provided,  however,  that,  in  order  to  encourage  sav-  Bank  may  arrange 
ing  among  the  children  of  the  schools  of  this  state,  a  bank  ings'^in IchooU. 
may,  with  the  written  consent  of  and  under  regulations 
approved  by  the  superintendent  of  banks  and,  in  case  of 
public  schools,  by  the  board   of  education  or  board   of 
school  trustees  of  the  city  or  district  in  which  the  school 
is  situated,  arrange  for  the  collection  of  savings  from  the 
school    children    by    the    principal    or    teachers    of    such 
schools  or  by  collectors.     The  principal,  teacher  or  per- 
son authorized  by  the  bank  to  make  collections  from  the 
school  children  shall  be  deemed  to  be  the  agent  of  the 
bank  and  the  bank  shall  be  liable  to  the  pupil  for  all  de- 
posits made  with  such  principal,  teacher  or  other  person, 
the   same   as   if   the   deposits   were   made   by   the   pupil 

[19] 


§9-11  BLYTH,  WITTER  &  CO. 

directly  with  the  bank.  Every  bank  and  every  such  officer 
or  director  violating  the  provisions  of  this  section  shall 
Penalty  for^vioiation  forfeit  to  the  people  of  the  state  the  sum  of  one  hundred 
dollars  for  every  day  during  which  any  branch  office 
hereafter  opened  shall  be  maintained  without  such  writ- 
ten approval. 

Directors.       Section  1 0.     No  person  shall  be  eligible  for  election  as 

director  of  a  bank  having  a  capital  stock  unless  he  is  a 

stockholder  of  the  bank,  owning,  in  his  own  right,  shares 

thereof  of  the  par  value  of  at  least  five  hundred  dollars; 

Director  after  eiec-  and  cvcry  pcrson  elcctcd  to  be  director  who,  after  such 

tion  ceasing  to  own,  .  in  ii  .i.  'if 

or  pledging,  qualify-  election,  shall  ceasc  to  be  the  owner  in  his  own  right  or 

ing  stock,  to  notify     ,  .,  ...  .,  iiii  i 

Supt.,  etc.  the  amount  or  such  stock  aforesaid,  or  shall  hypothecate 
or  in  any  way  pledge  such  stock  as  security  for  any  loan 
or  debt  shall  immediately  notify  the  superintendent  of 
banks  in  writing  of  such  sale  or  hypothecation  and  such 
director  may  be  removed  from  the  office  of  director  by 
Executor  or  adminis-  the  Superintendent  of  banks;  provided,  however,  that  any 

trator  when  eligible 

as  director,  executor  or  executrix,  administrator  or  administratrix 
holding  shares  of  a  bank  of  the  par  value  of  five  hundred 
dollars,  in  his  or  her  representative  capacity  shall  be 
eligible  for  election  as  a  director  thereof.  If  a  bank  be 
organized  without  capital  stock,  no  person  shall  be  eli- 
gible as  a  director  thereof  unless  be  is  both  a  member  and 
a  depositor  of  such  bank. 

Directors'  Meetings  Scction  1  1 .  The  board  of  directors  of  a  bank  organized 
once  a  month,  under  the  laws  of  this  state  must  hold  a  meeting  in  its 
banking  premises  at  least  once  a  month.  Each  such 
oeth  of  directors,  director,  when  appointed  or  elected,  shall  take  an  oath 
that  he  will,  as  far  as  the  duty  devolves  on  him,  diligently 
and  honestly  administer  the  affairs  of  such  bank,  and  will 
not  knowingly  violate  or  willfully  permit  to  be  violated  any 
of  the  provisions  of  law  applicable  to  such  bank,  and  that 
he  is  the  owner  in  good  faith  and  in  his  own  right  of  shares 
of  stock  of  the  par  value  required  by  section  ten  of  this  act, 
subscribed  by  him  or  standing  in  his  name  on  the  books 

[20] 


GENERAL  PROVISIONS  §  11-12 


of  the  bank,  and  that  the  same  to  an  amount  equal  to  the 
par  value  of  at  least  five  hundred  dollars,  are  not  hypoth- 
ecated or  in  any  way  pledged  as  security  for  any  loan 
or  debt.  Such  oath  shall  be  subscribed  by  the  director 
making  it,  certified  by  the  officer  before  whom  it  is  taken, 
and  immediately  transmitted  to  the  superintendent  of 
banks  and  filed  and  preserved  in  his  office;  provided,  the 
managers  or  agents  residing  in  this  state,  of  a  foreign 
corporation  transacting  any  banking  business  in  this  state,  Oath  required  of 

^  &  ^  rill         Resident  Managers 

shall  take  an  oath  that  they  will,  as  far  as  the  duty  de-  or  Agents. 
volves  on  them,  diligently  and  honestly  administer  the 
affairs  of  such  bank,  and  will  not  knowingly  violate  or 
wilfully  permit  to  be  violated  any  of  the  provisions  of 
law  applicable  to  such  bank.  Such  oath  shall  be  sub- 
scribed by  the  managers  or  agents  taking  it,  certified  by 
the  officer  before  whom  it  is  taken,  and  immediately 
transmitted  to  the  superintendent  of  banks  and  filed  and 
preserved  in  his  office. 

Section  1  2.     No  person,  firm,  company,  copartnership  p"atro'n%?c.!^n'o't 
or  corporation,  either  domestic  or  foreign,  not  subject  to  ^"gVon^of  supr'^and 
the  supervision  of  the  superintendent  of  banks,  and  not  ^ct^hlirnot  ad" 
required,  by  the  provisions  of  this  act,  to  report  to  him,  vertise  acceptance  of 

^  '        •'  '^  ^  money  or  savings,  or 

and  which  has  not  received  a  certificate  to  do  a  banking  do  acts  inducing  be- 

"    lief  that  place  or 

business  from  the  superintendent  of  banks,  shall  adver-  °f i',t.,\' eompany.""^ 
tise  that  he  or  it  is  receiving  or  accepting  money  or  sav- 
ings, and  issuing  notes  or  certificates  of  deposit  therefor, 
or  shall  make  use  of  any  office  sign,  at  the  place  where 
such  business  is  transacted,  having  thereon  any  artificial 
or  corporate  name,  or  other  words  indicating  that  such 
place  or  office  is  the  place  or  office  of  a  bank  or  trust 
company,   that  deposits  are  received  there  or  payments 
made  on  check,   or  any  other  form  of  banking  business  f J^^^^^Vor  wo^rds"" 
transacted,   nor  shall  any  such  person  or  persons,   firm,   officr^s"iha^t  ofVank 
company,  copartnership  or  corporation,  domestic  or  for-  °tc/"^  company, 
eign,  make  use  of  or  circulate  any  letterheads,  billheads, 
blank  notes,  blank  receipts,  certificates  or  circulars,  or  any 

[211 


§12 BLYTH.  WITTER  &  CO. 

written  or  printed,  or  partly  written  and  partly  printed, 
paper,  w^hatever,  having  thereon  any  artificial  or  cor- 
porate name  or  other  word  or  words  indicating  that 
such  business  is  the  business  of  a  bank,  savings  bank  or 
trust  company;  nor  shall  any  such  person,  firm,  company, 
copartnership  or  corporation,  or  any  agent  of  a  foreign 
corporation  not  having  an  established  place  of  business 
in  this  state,  solicit  or  receive  deposits  or  transact  business 
in  the  way  or  manner  of  a  bank,  savings  bank  or  trust 
company,  or  in  such  a  way  or  manner  as  to  lead  the  pub- 
lic to  believe  that  its  business  is  that  of  a  bank,  savings  bank 
or  trust  company.  Nor  shall  any  person,  firm,  company, 
copartnership  or  corporation,  domestic  or  foreign,  not 
subject  to  the  supervision  of  the  superintendent  of  banks, 
and  not  required  by  the  provisions  of  this  act  to  report  to 
him,  and  which  has  not  received  from  the  superintendent 
of  banks  a  certificate  to  do  a  banking  business,  hereafter 
transact  business  under  any  name  or  title  which  contains 
the  word  "bank,"  or  "banker,"  or  "banking,"  or  "sav- 
ings bank,"  or  "savings"  or  "trust"  or  "trustee"  or  "trust 
Section  shall  not  ap-  Company";  provided,  that  this  section  shall  not  apply  to 

ply  to  name  of  exist-     .  ,  1_     -IJ'  J    1  •    i.* 

ing  Bidg.  &  Loan  the  Corporate  name  or  any  buildmg  and  loan  association 
now  or  heretofore  doing  business  in  this  state;  and  pro- 
Nature  of  business  vided,    further,    that   any  such   association   having   in   its 
Assn^must^be  shown  Corporate  name  words  not  clearly  indicating  the  nature 
"advertisfng!  of  its  business  shall,  on  all  signs,  letterheads  and  advertis- 
ing matter,  state  "This  is  a  building  and  loan  association" 
or  words  to  that  effect;  and  provided,  further,  that  any 
building  and  loan  association  may  borrow  money,   issue 
investment  certificates  or  evidences  of  indebtedness,  stat- 
ing the  rate  of  interest  and  terms  and  conditions  of  repay- 
ment, and  do  such  other  business  as  may  be  authorized 
by  the  laws  of  the  state  relating  to  building  and  loan  as- 
Uo  Bidg.  &  Loan  sociations;  and  provided,   further,   that  no  such  associa- 

Assn.  shall  hold  itself 

out  as  savings  bank,  tion  shall  advertise  or  hold  itself  out  to  the  public  as  a 
savings  bank.  Any  person,  firm,  company,  copartner- 
ship or  corporation,   domestic  or  foreign,   violating  any 

[22] 


GENERAL  PROVISIONS  §  12- 12a 


provision  of  this  section  shall  forfeit  to  the  state  one 
hundred  dollars  a  day  for  every  day  or  part  thereof 
during  which  such  violation  continues.  Upon  action 
brought  by  the  superintendent  of  banks  the  court  may 
issue  an  injunction  restraining  any  such  person,  firm,  com- 
pany, copartnership  or  corporation  from  further  using 
such  words  in  violation  of  the  provisions  of  this  section 
or  from  further  transacting  business  in  such  a  way  or 
manner  as  to  lead  the  public  to  believe  that  its  business 
is  that  of  a  bank,  savings  bank  or  trust  company  during 
the  pendency  of  such  action  and  for  all  time  and  may 
make  such  other  order  or  decree  as  equity  and  justice 
may  require. 

Section    12a.      Every  person,    firm,    company,    copart-  Every  person,  firm 

■'      ^  1  ^  »  corporation,  etc.,  do- 

nership  or  corporation,  domestic  or  foreign,   advertising  mestic  or  foreign— 

that  he  or  it  is  receiving  or  accepting  money  or  savings, 

and  issuing  notes  or  certificates  of  deposit  therefor,    or  Advertising  transac- 

.       .  •  1         !_        •  £  ^^°°  °^  banking, 

advertising  that  he  or  it  is  transacting  the  business  or  a  savings  bank  or 

...  .   .  £   trust  company  bust- 

bank,  savings  bank  or  trust  company,   or  making  use  or  ness,  in  any  form, 

any  office  sign  at  the  place  where  such  business  is  trans- 
acted, having  thereon  any  artificial  or  corporate  name,  or  Must  have  proper 

=  -^  capital  paid  in  and 

Other  words  indicating  that  such   place  or   office  is  the  set  aside  and  have 

received  certificate 

place  or  office  of  a  bank,  or  trust  company,  or  that  de-  from  supt. 
posits  are  received  there  or  payments  made  on  check,  or 
that  interest  is  paid  on  deposits,  or  that  certificates  of 
deposit,  either  with  or  without  interest  are  being  issued, 
or  that  any  other  form  of  banking  business  is  transacted, 
and  every  person,  firm,  company,  copartnership  or  cor- 
poration, domestic  or  foreign,  making  use  of  or  circulat- 
ing any  letterheads,  billheads,  blank  notes,  blank  receipts, 
certificates  or  circulars,  or  any  written  or  printed,  or 
partly  written  and  partly  printed,  paper,  whatever,  hav- 
ing thereon  any  artificial  or  corporate  name,  or  adver- 
tising that  such  business  is  the  business  of  a  bank,  savings 
bank  or  trust  company,  must  have  the  proper  capital 
stock  paid  in  and  set  aside  for  the  purpose  of  transacting  Penalty. 
such  business,  and  must  have  received  from  the  superin- 

[23] 


§  12a  BLYTH.  WITTER  &  CO. 

tendent  of  banks,  as  provided  for  in  this  act,  a  certificate 
to  do  a  banking  business.  Any  person,  firm,  company,  co- 
partnership or  corporation,  domestic  or  foreign,  violating 
any  provision  of  this  section  shall  forfeit  to  the  state  one 
hundred  dollars  a  day  for  every  day  or  part  thereof  dur- 
ing which  such  violation  continues.  Upon  action  brought 
by  the  superintendent  of  banks  the  court  may  issue  an 
injunction  restraining  any  such  person,  firm,  company, 
copartnership  or  corporation  from  further  violating  any 
provision  of  this  section,  and  may  make  such  further 
Every  person,  firm,  order  or  decree  as  equity  and  justice  may  require.     Every 

corporation,  etc.,  ~i        j  i  j         ~i  j 

transacting  any  busi-  person,  firm,  Company,  copartnership  or  corporation 
must  do  so  under  doing  any  of  the  things  or  transacting  any  of  the  business 
defined  in  this  section,  must  transact  such  business  ac- 
cording to  the  provisions  of  the  bank  act,  and  the  super- 
intendent of  banks  or  his  deputy  or  examiners  shall  have 
authority  to  examine  the  accounts,  books  and  papers  of 
every  such  person,  firm,  company,  copartnership  or  cor- 
poration, domestic  or  foreign,  in  order  to  ascertain 
whether  such  person,  firm,  company,  copartnership  or 
corporation  has  violated  or  is  violating  any  provisions  of 

Section  not  applicable  this  section ;  provided,  that  this  section  shall  not  apply  to 

to  corporate  name  of 

existing  Bidg.  &  the  Corporate  name  of  any  building  and  loan  association 

Loan  Assn. 

now  or  heretofore  doing  business  in  this  state;  and  pro- 
vided, further,  that  any  such  association  having  in  its 
corporate  name  words  not  clearly  indicating  the  nature 
of  its  business  shall,  on  all  signs,  letterheads  and  adver- 
tising matter,  state:  "This  is  a  building  and  loan  associa- 
Any  Bidg.  &  Loan  tJQn"  or  words  to  that  effect;  and  provided,  further,  that 

Assn.  may  borrow  ^ 

money,  etc.  ^ny  building  and  loan  association  may  borrow  money, 
issue  investment  certificates  or  evidences  of  indebtedness, 
stating  the  rate  of  interest  and  terms  and  conditions  of 
repayment,  and  do  such  other  business  as  may  be  author- 
ized by  the  laws  of  the  state  relating  to  building  and 
No  Bidg.  &  Loan  loan   associations;   and   provided,    further,    that   no   such 

Assn.  shall  hold  itself 

out  as  a  savings  bans,  association  shall  advertise  or  hold  itself  out  to  the  public 
as  a  savings  bank. 

[241 


GENERAL  PROVISIONS  §  12b- 1 2c 


Section  1  2b.     Nothing  in  this  act  shall  be  construed  or  JJfi'tion  chTrifrer' 
held  to  apply  to  any  corporation  organized  under  the  laws  ?,Vst'compa'nyTo  u°t 
of  any  other  state  which  is  authorized  by  its  charter  or  corporate  title. 
articles  of  incorporation  to  transact  the  business  of  life 
insurance  and  also  to  be  known  as  and  to  transact  busi- 
ness as  a  trust  company  and  which  shall  have  complied 
with  the  laws  of  the  state  affecting  the  transaction  in  this 
state  of  the  business  of  life  insurance  by  a  foreign  cor- 
poration  and    which   shall   have   heretofore    engaged    in 
such  business  of  life  insurance  in  this  state,  in  such  man- 
ner as  to  forbid  or  prevent  its  making  use  of  its  corporate 
title  in  its  life  insurance  business  in  this  state  in  any  such 
way  and  to  any  such  extent  as  it  might  have  made  use  of 
the  same  if  this  act  had  not  been  passed. 

Section    I  2c.      Any  corporation   organized   under  the  f^nr^uh  uw. 
laws  of  any  country  or  state  other  than  this  state  which  l[^:^'l:ZlZV" 
has  complied  with  all  of  the  laws  of  this  state  pertaining  ^taLTfficeft°o  lend 
to  foreign  corporations  and  is  not  engaged  in  the  business  ^'^^^tcf  °' ''" 
of  banking  or  receiving  money  on  deposit  in  this  state 
may  lend  money  or  buy  and  sell  bonds  in  this  state,  and 
for  that  purpose,  may  maintain  offices  in  this  state,  and 
sue  and  be  sued  in  this  state  under  its  proper  corporate 
name,  notwithstanding  any  prohibitions  contained  in  this 
act  as  to  the  use  of  any  words  in  the  name,  signs  or  adver- 
tising matter  of  corporations  not  under  the  supervision  of 
the  superintendent  of  banks;   provided,   that  nothing  in  f;/J^^„^^*^„'k'rnVo^ 
this  act  shall  be  construed  to  prohibit  any  representative  *;^"/jfi^'=°Td'?r"om"°' 
of  any  foreign  banking  corporation  from  maintaining  an  ^^^^^';*^^^i,°f  ^'  '"^^ 
office  in  this  state  as  the  office  of  a  representative  and  not 
the  place  of  business  of  a  bank  or  trust  company,  nor  to 
prohibit    such    representative    from    making    use    of   any 
office  sign  at  the  place  where  such  representative's  office 
is  maintained  having  thereon  words  indicating  that  such 
office  is  the  place  of  business  of  a  representative  of  a  for-  Such  representative 

^  .   1      1      r         I  L  ^^^  "^®  foreign 

eisn  bank  or  trust  company;  and  provided,  further,  that  banks  printed  mat- 

°  ...  ff  tsr  in  transacting 

anv  reoresentative  of  a  foreign  bank  maintaining  an  office  business  as  repre- 

rif-l_l'      sentative. 

within  this  state  may  make  use  of  such   foreign   bank  s 

[25] 


§  i2c-13  BLYTH.  WITTER  &  CO. 


letterheads,  circulars  and  other  printed  matter  in  the 
transaction  of  business  as  such  representative;  and  pro- 
vided, further,  every  representative  of  any  foreign  bank 
or  trust  company  before  opening  an  office  as  a  repre- 
such  representative  sentative  shall  havc  received  a  license  from  the  superin- 

must  first  obtain  ■,  r     t  t  i  •        '  £C 

license  from  Supt.  tendent   of   banks   to    open   such   representative  s    oriice. 

to  open  office.    _,       ,     ,.  ,        .  ,  •■.         .  i 

Such  license  may  be  issued  upon  application  to  the  super- 
intendent of  banks  and  the  payment  of  an  annual  license 
fee  of  fifty  dollars  and  may  be  refused  or  revoked  by  the 
superintendent  of  banks  at  his  discretion. 

R^^steaLsMp  and       Scction    I  3.      No  person,   firm  or  corporation,   except 
and  express  com-  ^^nks    and    duly    incorporated    and    qualified    railroad, 

panies  to  handle  j  r  i 

foreign  exchange,  steamship  and  express  companies,  or  general  travel  and 
tourist  copartnerships  and  corporations  that  are  in  actual 
international  operation,   shall  engage  in  this  state  in  the 

aequirements  for  business  of  receiving  money  for  the  purpose  of  transmit- 

corporations  so  o  ./  *         * 

engaged,  ^j^^g  ^^^le  Same,  or  the  equivalent  thereof,  to  foreign  coun- 
tries. Every  such  company  shall,  within  thirty  days  after 
the  date  this  section  goes  into  effect,  and  thereafter  on 
or  before  the  first  day  of  January  and  the  first  day  of 
July  in  each  year  file  with  the  superintendent  of  banks  a 
certificate  specifying  each  place  in  this  state  where  such 
company  maintains  its  own  office  where  money  is  or  will 
be  received  for  transmission  to  foreign  countries,  and  the 
person  or  persons  in  such  office  authorized  to  receive 
money  for  such  purpose;  and  shall,  also  within  thirty  days 
after  this  act  goes  into  effect  file  with  the  superintendent 
of  banks  a  certificate  specifying  the  name  and  business 
address  of  every  person,  not  regularly  employed  by  it  in 
its  own  office,  who  is  authorized  to  receive  money  for  the 
purpose  of  transmitting  the  same,  or  the  equivalent 
thereof,  to  foreign  countries;  and  each  person  specified 
in  such  certificates  shall  be  the  designated  agent  of  the 
company  making  the  certificate  for  all  purposes  con- 
nected with  or  incident  to  the  receipt  and  transmission 
of  money  or  its  equivalent  to  foreign  countries. 

[261 


GENERAL  PROVISIONS  §  13 

Whenever  any  such  agent  who  is  not  regularly  em- 
ployed by  any  such  company  in  its  own  office  is  replaced, 
or  an  additional  agent,  who  is  not  so  employed  by  any 
such  company,  is  authorized  to  receive  money  for  the 
purpose  of  transmitting  same,  or  the  equivalent  thereof  as 
aforesaid,  notice  of  such  fact  and  of  the  name  of  the  per- 
son replacing  the  original  agent,  or  the  name  of  such  ad- 
ditional agent,  shall  be  certified  forthwith  to  the  superin- 
tendent of  banks;  and  such  person  shall  thenceforth  be 
the  designated  agent  of  such  company  aforesaid  until 
notice  of  the  termination  of  such  agency  is  filed  with  the 
superintendent  of  banks.  The  deposit  hereinafter  re- 
quired shall  be  in  addition  to  and  not  in  lieu  of  the  pri- 
mary liability  of  any  such  company  for  the  acts  of  its 
designated  agents. 

At  the  time  of  filing  the  certificate  first  herein  required,  fe?u?reVforTrtns. 
and  before  any  agent  of  any  such  company  is  authorized  ^orSn  counS*° 
to  transact  any  business  hereunder,  the  company  filing 
such  certificate  shall  deposit  with  the  treasurer  of  state, 
upon  authorization  of  the  superintendent  of  banks  in  the 
manner  provided  by  section  ninety-six  of  this  act,  the  sum 
of  fifty  thousand  dollars  in  lawful  money  of  the  United 
States,  or  in  the  securities  specified  in  section  ninety-six 
of  this  act;  in  case  such  deposit  is  in  securities,  the  com- 
pany making  the  same  shall  have  the  privilege  of  with- 
drawal, substitution  and  collection  of  interest  provided 
in  said  section;  or  in  lieu  thereof  such  company  shall 
execute  and  deliver  to  the  superintendent  of  banks,  who 
shall  deposit  it  with  the  treasurer  of  state,  a  bond  or  other 
surety  acceptable  to  the  superintendent  of  banks  in  the 
sum  of  fifty  thousand  dollars  to  cover  money  received  by 
any  and  all  its  agents  in  this  state  for  the  purpose  of  trans- 
mission to  foreign  countries;  such  bond  or  other  surety  to 
be  conditioned  upon  the  faithful  holding  and  transmis- 
sion of  money,  or  the  equivalent  thereof,  which  shall  be 
delivered  to  or  deposited  with  any  such  agent  for  trans- 
mission to  a  foreign  country,  for  the  benefit  of  such  per- 

[27] 


§  13  BLYTH,  WITTER  &   CO. 

sons  as  shall  deliver  to  or  deposit  money  with  any  such 
agent  of  such  company  for  such  purpose.  Such  bond 
shall  be  executed  by  such  company  with  a  corporate 
surety  company,  acceptable  to  the  superintendent  of 
banks,  as  surety.  Such  moneys  or  securities  deposited 
with  the  treasurer  of  state  and  the  money  which  in  case 
of  default  shall  be  paid  on  such  bond  or  other  surety 
shall  constitute  a  trust  fund  for  the  benefit  of  such  persons 
as  shall  deliver  to  or  deposit  with  any  such  designated 
agent  of  such  company  money  for  transmission  to  foreign 
on"such  bond^or  Countries  as  aforesaid;  suit  to  recover  on  any  such  bond 
surety-how  brought.  ^^  other  Surety  may  be  brought  by  or  upon  the  relation 
of  any  party  aggrieved,  in  a  court  of  competent  jurisdic- 
tion of  any  county  in  which  such  company  has  an  agent; 
and  service  of  summons  on  any  agent  of  such  company 
How  moneys  for-  shall  be  Sufficient.     All  moneys  received  for  transmission 

warded  and  receipted 

for.  to  a  foreign  country  by  a  railroad,  steamship  or  express 
company  shall  be  forwarded  to  the  person  to  whom  the 
same  is  directed  to  be  transmitted  within  ten  days  after 
the  receipt  thereof.  The  receipt  given  by  any  such  com- 
pany by  its  agent  or  agents,  for  deposits  of  money  re- 
ceived for  transmission  to  a  foreign  country  shall  be  on 
a  form  or  forms  certified  copies  of  which  have  first  been 
filed  with  the  superintendent  of  banks;  in  case  of  use  by 
any  such  company  of  a  form  or  forms  for  this  purpose 
certified  copies  of  which  have  not  been  filed  with  the 
superintendent  of  banks,  whether  the  use  of  such  receipts 
is  authorized  or  not,  shall  not  relieve  such  company  of  its 
liability  for  the  acts  of  such  agent  hereunder  and  such 
Penalty,  company  shall  be  subject  to  a  penalty  of  fifty  dollars  for 
every  such  violation. 

Inspection  of       Everv  agent  of  any  such  company  not  regularly  em- 
Agent  by  Supt.  J       i=  11111  .  •  J 

ployed  in  its  own  office  shall  be  subject  to  mspection  and 
examination  by  the  superintendent  of  banks  in  order  to 
ascertain  that  such  business  is  being  lawfully  conducted, 
and  that  all  moneys  received  are  properly  accounted  for; 
for  which  purpose  the  superintendent  of  banks  may  also 

[281 


GENERAL  PROVISIONS  §  13 

prescribe  the  manner  and  form  of  keeping  the  books  and 
accounts  of  such  agent. 

Whenever  the  superintendent  of  banks  upon  his  own 
determination  makes  an  examination  of  any  such  agent 
transacting  or  about  to  transact  business  under  the  provi- 
sions of  this  section,  the  expenses  thereof  shall  be  paid 
by  the  company  represented  by  such  agent. 

Every  railroad,  steamship  and  express  company  trans-  Annual  Report  by 

•'  r  r  r       J  such  companies. 

acting  business  in  this  state  under  this  section  shall  an- 
nually, on  or  before  the  fifteenth  day  of  March,  file  with 
the  superintendent  of  banks  its  duly  verified  report,  in 
the  form  prescribed  by  the  superintendent  of  banks, 
showing  in  such  detail  as  may  be  required  by  him,  its 
business  and  transactions  during  the  preceding  calendar 
year  relative  to  the  receipts  and  transmission  of  money  to 
foreign    countries.       The    superintendent    of    banks    shall  Penalty  for  faiiuro 

111.  1      '''''  ™*^®  report. 

have  the  power  to  revoke  the  authority  to  transact  such 
business  in  this  state  of  any  railroad,  steamship  or  express 
company  which  fails  to  make  and  file  such  annual  report 
as  herein  provided. 

Every  railroad,   steamship  or  express  company  trans-  Annual  fee  payable 
acting  business  in  this  state  under  this  section  shall  pay 
to  the  superintendent  of  banks  on  or  before  the  first  day 
of  July  in  each  year  a  fee  of  two  hundred  fifty  dollars. 

This  section  shall  not  apply  to  the  receipt  of  money  for  Teiegrraph  companies 

excepted. 

immediate  transmission  by  telegraph  by  the  duly  author- 
ized agent  of  any  duly  incorporated  telegraph  company, 
at  any  regularly  established  office  of  such  company. 

Whoever,  not  being  an  authorized  officer  or  employee  Penalty  for  unauthor- 

ized  soliciting  or 

of  a  bank,  or  the  duly  designated  agent  for  that  purpose  receiving  money  for 

transmission, 

of  a  railroad,  steamship  or  express  company,  holds  him- 
self out  as  authorized  to  receive,  or  solicits,  or  receives 
money  for  the  purpose  of  transmitting  the  same,  or  the 
equivalent  thereof,  to  foreign  countries,  shall,  upon  con- 
viction, be  fined  not  more  than  five  thousand  dollars  oi 

[29] 


§  13-15 BLYTH.  WITTER  &   CO. 

imprisoned  in  the  penitentiary  not  more  than  ten  years, 
or  both. 

[Publishers'  note,  re  Section  13,   as  amended  1921: 

The  purpose  of  this  very  material  amendment  is  the  regulation  and  control  of 
dealings  in  foreign  exchange.  Only  hanks,  duly  incorporated,  and  qualified  rail- 
road, steamship  and  express  companies,  general  travel  and  tourist  copartnerships 
and  corporations  may  receive  money  for  transmission  to  foreign  countries.  The 
amendment  does  not  affect  banks  directly,  but  prescribes  the  method  for  trans- 
acting this  business  by  railroad,  steamship  and  express  companies.  They  must 
assign  to  the  business  in  this  State  capital  of  not  less  than  the  amount  required 
for  a  bank  in  the  largest  place  where  such  company  has  an  office  or  agency.  They 
must  also  file  a  list  of  agents  with  the  superintendent  of  banks,  and  deposit  $50,- 
000  in  money  or  in  securities  or  put  up  a  bond  in  that  amount. 

The  superintendent  of  banks  may  prescribe  the  method  of  keeping  books  and 
accounts,  and  shall  examine  the  agents  and  companies  doing  this  business.  Such 
companies  shall  make  an  annual  report  to  the  superintendent  and  pay  a  fee  of 
$250  a  year.] 

Advertisement  of       Section  1  4.     No  bank,  or  officer  thereof,  shall  advertise 

capital. 

in  any  manner,  or  publish  any  statement  of  the  capital 
authorized  or  subscribed,  unless  it  or  he  advertise  and 
publish  in  connection  therewith,  the  amount  of  capital 
actually  paid  up.  No  bank  shall  publish  a  statement  of 
Joint  advertising  jjg  j-esources  or  liabilities  in  connection  with  those  of  any 

condition  of  two 

banks,  other  bank,  unless  such  statement  shall  show  the  resources 
and  liabilities  of  each  bank  separately;  nor  shall  surplus 
and  undivided  profits  be  advertised  as  an  aggregate. 

All  deposits,  un-       Section  15.     All  amounts  of  money  heretofore  or  here- 

claimed  or  not  with- 

drawn  for  20  years,  after  deposited  with  any  bank  to  the  credit  of  depositors 

to  be  deposited  with 

State  Treasurer,    who  have  not  made  a  deposit  on  said  account  or  with- 

after  judgment,  as 

provided  by  law.  drawn  any  part  thereof  or  the  interest  and  which  shall 
have  remained   unclaimed    for  more   than   twenty  years 
after  the  date  of  such  deposit,  or  withdrawal  of  any  part 
or  principal  or  interest,  and  where  neither  the  depositor 
or  any  claimant  has  filed  any  notice  with  such  bank  show- 
ing his  or  her  present  residence,  shall,  with  the  increase 
and  proceeds  thereof,  be  deposited  with  the  state  treas- 
urer after  judgment  in  the  manner  provided  in  the  Code 
Court  procedure  to  o^  ^ivil  Procedure.     At  the  time  of  issuing  the  summons 
taLing°such  judg-  '^  ^^^  action  provided  for  in  section  1273  of  the  Code  of 
ment  against  bank  Qiy{\  Procedure,  the  clerk  shall  also  issue  a  notice  signed 

ana  ail  claimants. 

by  him,  giving  the  title  and  number  of  said  action,  and 
referring  to  the  complaint  therein,  and  directed  to  all 
persons,  other  than  those  named  as  defendants  therein, 

[30] 


GENERAL  PROVISIONS 


claiming  any  interest  in  any  deposit  mentioned  in  said 
complaint,  and  requiring  them  to  appear  within  sixty 
days  after  the  first  publication  of  such  summons,  and 
show  cause,  if  any  they  have,  why  the  moneys  involved 
in  said  action  should  not  be  deposited  with  the  state 
treasurer  as  in  said  section  provided,  and  notifying  them 
that  if  they  do  not  so  appear  and  show  cause,  the  state 
will  apply  to  the  court  for  the  relief  demanded  in  the 
complaint.  A  copy  of  said  notice  shall  be  attached  to 
and  published  with  the  copy  of  said  summons  required 
to  be  published  by  said  section,  and  at  the  end  of  the 
copy  of  such  notice  so  published  there  shall  be  a  state- 
ment of  the  date  of  the  first  publication  of  said  summons 
and  notice.      Any  person  interested  may  appear  in  said  Any  person  inter- 

j  .  .  I      .  ested  may  become 

action  and  become  a  party  thereto.    Upon  the  completion  pai'.y  to  action. 
of  the  publication  of  the  summons  and  notice,   and  the 
service  of  the  summons  on  the  defendant  bank,  or  banks, 
as  in  said  section    12  73  of  the  Code  of  Civil  Procedure 
provided,  the  court  shall  have  full  and  complete  jurisdic- 
tion over  the  state,  and  the  said  deposits  and  of  the  per- 
son of  every  one  having  or  claiming  any  interest  in  the 
said  deposits,   or  any  of  them,   and  shall  have  full  and 
complete  jurisdiction   to   hear  and   determine  the  issues 
therein,   and  render   the  appropriate  judgment  thereon. 
The  president  or  managing  officer  of  every  bank  must,  f;;;'^';";/^'^^^ " 
within  fifteen  days  after  the  first  day  of  January  of  every  ^womTa^^ment'"" 
year,   return  to  the  superintendent  of  banks  and  to  the  f orth'"n  sectio^"  ^* 
state  controller  a  sworn  statement  showing  the  names  of 
depositors  known  to  be  dead,  or  who  have  not  made  fur- 
ther deposits,  or  withdrawn  any  moneys  during  the  pre- 
ceding twenty  years.     Such  statement  shall  show  in  detail 
the  following  matters,  viz. : 

First — The  name  and  last  known  place  of  residence  or 
postoffice  address  of  the  person  making  such  deposit; 

Second — The  amount  and   date  of  such  deposit  and 

[31] 


§  15  BLYTH.  WITTER  &  CO. 

whether  the  same  are  in  moneys  or  securities,  and  if  the 
latter,  the  nature  of  the  same; 

Third — ^The  interest  due  on  such  deposit,  if  any,  and 
the  amount  thereof; 

Fourth — The  sum  total  of  such  deposit,  together  with 
the  interest  added  thereto  due  from  such  bank  on  account 
of  such  deposit  or  deposits  and  the  interest  thereon  to 
such  depositor,  but  nothing  contained  herein  shall  require 
any  corporation  or  person  renting  lock  boxes  or  safes  in 
vaults  for  storage  purposes  to  open  or  report  concerning 
Aforesaid  reports  property  stored  therein.     Such  reports  itemized  as  afore- 

shall  be  sworn  to.   "^       '^        •'  i  •  i  j 

said  shall  be  signed  by  the  person  making  the  same  and 
shall  be  sworn  to  before  a  person  competent  to  adminis- 
ter oaths  as  a  full,  complete  and  truthful  statement  of 
each  of  the  items  therein  contained. 

Bank  must  return       The  president  or  managing  officer  of  every  bank  must, 

biennial  statement        .  ^  .       r  c  i  r  ir  i  CT  C 

of  depositors  de-  withm  hiteen  days  arter  the  rirst  day  or  January  or  every 

ceased  or  not  making        ,,  ,  ,  ,ii  •^Itt'Ll 

or  withdrawing  de-  odd  numbered  year,  return  to  the  supermtendent  or  banks 

posits  during  preced-  .  .        i  •  il  f      j  -i. 

ing  10  years,  a    sworn    Statement    showmg    the    names    or    depositors 
known  to  be  dead,   or  who  have  not  made  further  de- 
posits,  or  withdrawn  any  moneys  during  the  preceding 
What  such  state-  ten  years.      Such   statements  shall   show  the  amount  of 

ments  shall  show.     ,  ii  .'i.i  i  f*i 

the  account,  the  depositor  s  last  known  place  or  residence 
or  post-office  address,  and  the  fact  of  death,  if  known  to 
such  president  or  managing  officer.  Such  president  or 
Notice  of  deposits  to  managing  officer  must  give  notice  of  these  deposits  in  one 
or  more  newspapers  published  in  or  nearest  to  the  town 
or  city  where  such  bank  has  its  principal  place  of  busi- 
ness, at  least  once  a  week  for  four  consecutive  weeks,  the 
cost  of  such  publication  to  be  paid  pro  rata  out  of  such 
unclaimed  deposits.  The  superintendent  of  banks  must 
incorporate  in  his  subsequent  report  such  returns  made  to 
him  as  provided  in  this  section.  If  any  president  or  man- 
aging officer  of  any  bank  neglects  or  refuses  to  make  the 
sworn  statements  required  by  this  section  such  bank  shall 
forfeit  to  the  State  of  California  the  sum  of  one  hundred 

[32] 


Penalties. 


GENERAL  PROVISIONS  §  I  5- 15a 


dollars  a  day  for  each  day  such   default  shall   continue. 

Any  president  or  managing  officer  of  any  bank  who  vio-  ^^*®  °^  receipt  of 

•'  deposits  transferred 

lates  any  of  the  provisions  of  this  section  shall  forfeit  to  ^""^  another  bank, 

etc. 

the  State  of  California  the  sum  of  one  hundred  dollars  a 
day  for  each  and  every  day  such  violation  shall  continue. 
For  the  purposes  of  this  section  all  deposits  received  by 
any  bank  under  the  provisions  of  section  thirty-one,  sec- 
tion thirty-one  a  or  section  thirty-one  b  of  this  act  shall 
be  deemed  to  have  been  deposited  with  such  bank  at  the 
time  the  deposit  was  made  with  the  bank  from  which  the 
deposit  was  transferred;  provided,  that  any  bank  which 
shall  make  any  deposit  with  the  state  treasurer  in  con-  Bank  making  deposit 
formity  with  the  provisions  of  this  section  shall  not  there-  under  section  msT'^*' 
after  be  liable  to  any  person  for  the  same  and  any  action 
which  may  be  brought  by  any  person  against  any  bank 
for  moneys  so  deposited  with  the  state  treasurer  shall 
be  defended  by  the  attorney  general  without  cost  to  such 
bank. 


thereafter  liable. 


[Publishers'  note,  re  Section  15,   as  amended  1921: 

This  section  is  the  same  as  the  old  Section  15  with  the  exception  that  the 
amended  section  omits  the  provision  that  "this  section  does  not  apply  to  any  de- 
posit by  or  in  the  name  of  a  person  known  to  the  president  or  managing  offiicer  to 
be  living." 

A  copy  of  Section  1273,  Code  of  Civil  Procedure,  which  section  is  referred  to 
in  the  above  section,  is  set  forth  in  the  Appendix  at  the  end  of  this  Act.] 

Sec.    15a.      When  any  deposit  shall  be  made  by  or  in  Deposits  by  or  in 

.  _  name  of  minor. 

the  name  of  any  minor,  the  same  shall  be  held  for  the  ex- 
clusive right  and  benefit  of  such  minor,  and  free  from  the 
control  or  lien  of  all  other  persons,  except  creditors,  and 
shall  be  paid,  together  with  the  dividends  thereon,  to  the 
person  in  whose  name  the  deposit  shall  have  been  made, 
and  the  receipt  or  acquittance  of  such  minor  shall  be  a 
valid  and  sufficient  release  and  discharge  to  such  savings 
bank  for  such  deposit  or  any  part  thereof. 

When   any   deposit   shall   be   made   by  any   person   in  Deposits  by  one  in 

-  ,  .  ,  •  1-      I         trust  for  another  wnen 

trust  ror  another,   and  no  other  or  further  notice  of  the  trust  not  in  writing. 
existence  and  terms  of  a  legal  and  valid  trust  shall  have 
been  given  in  writing  to  such  savings  bank,  in  the  event 
of  the  death  of  the  trustee,  the  deposit  or  any  part  thereof, 

[331 


15a- 16  BLYTH,  WITTER  &  CO. 

together  with  the  dividends  thereon,  may  be  paid  to  the 
person  for  whom  the  deposit  was  made. 

Joint  deposits^ with  y^},en  a  deposit  shall  be  made  by  any  person  in  the 
survivorship,  j^a^es  of  such  depositor  and  another  person  and  in  form 
to  be  paid  to  either  or  the  survivor  of  them,  such  deposit 
and  any  additions  thereto  made  by  either  of  such  persons 
after  the  making  thereof,  shall  become  the  property  of 
such  persons  as  joint  tenants,  and  the  same  together  with 
all  dividends  thereon  shall  be  held  for  the  exclusive  use 
of  such  persons  and  may  be  paid  to  either  during  the  life- 
time of  both  or  to  the  survivor  after  the  death  of  one  of 
them,  and  such  payment  and  the  receipt  or  acquittance 
of  the  one  to  whom  such  payment  is  made  shall  be  a  valid 
and  sufficient  release  and  discharge  to  such  savings  bank 
for  all  payments  made  on  account  of  such  deposit  prior 
to  the  receipt  by  such  savings  bank  of  notice  in  writing 
not  to  pay  such  deposit  in  accordance  with  the  terms 
thereof.  The  making  of  the  deposit  in  such  form  shall, 
in  the  absence  of  fraud  or  undue  influence,  be  conclusive 
evidence,  in  any  action  or  proceeding  to  w^hich  either  such 
savings  bank  or  the  surviving  depositor  is  a  party,  of  the 
intention  of  both  depositors  to  vest  title  to  such  deposit 
and  the  additions  thereto  in  such  survivor. 

[Publishers'  note,  re  Section  15a,   as  amended  1921: 

This  new  section  authorizes  (1)  deposits  by  or  in  the  name  of  a  minor;  (2) 
deposits  by  any  person  in  trust  for  another  with  authorization  that  the  deposit 
may,  upon  the  death  of  the  trustee,  be  paid  to  the  person  for  whom  the  deposit 
was  so  made,  unless  the  bank  have  written  notice  of  the  existence  and  terms  of  a 
legal  trust;  and  (3)  joint  deposits  with  the  right  of  survivorship.] 

(Section  16.      Repealed  1919.) 

[Publishers'   note,  re   Section   16,   repealed   1919. 

The  first  paragraph  of  Section  16  was  simply  declarative  of  the  right  of  Sav- 
ings Banks  to  indulge  a  joint  deposit  with  right  of  survivorship.  It  was  not  deemed 
necessary  to  retain  that  part  of  the  section.  (See  Crowley  vs.  Union  Savings 
Bank  and  Trust  Co.,  30  Cal.,  App.  144,  and  McCarty  vs.  Holland,  30  Cal,,  App. 
495.) 

The  second  and  last  paragraphs  of  Section  16  of  the  Bank  Act  and  Section  1454 
of  the  Code  of  Civil  Procedure  were  substantially  the  same,  Both  related  to  a 
privilege  granted  to  certain  surviving  heirs  of  a  deceased  depositor  in  a  bank  to 
withdraw  from  that  bank  any  sum  not  greater  than  $1,000  if  that  sum  is  the 
aggregate  of  all  moneys  deposited  in  banks  of  this  State  by  the  deceased  deposi- 
tor. There  was  pending  before  the  Legislature  at  the  1919  Session  an  amend- 
ment to  said  Section  1454  to  permit,  under  similar  conditions,  the  additional  right 
of  receiving  personal  property  on  deposit  or  in  safe  deposit  boxes  in  an  amount 
not  to  exceed  $500.  In  order  not  to  provoke  a  conflict  as  between  that  Section 
and   Section   16   of  the   Bank   Act,    Section   16   was   repealed.      The   amendment   to 

[34] 


GENERAL  PROVISIONS  §  16-19 


Section  1454,  however,  failed  of  passage  in  1919.  A  similar  eifort  to  have  such 
statute  enacted  by  the  Legislature  of  1921  was  likewise  unsuccessful.  The  sub- 
ject is  therefore  governed  by  Section  1454  in  its  existing  rorm.  For  a  copy  of 
said  Section,  see  Appendix.] 

Section  1  7.     Every  bank  shall  keep  posted  in  its  office,  f -,^ ^,t"s?bi1  to 
in  a  conspicuous  place,  accessible  to  the  public  generally,  ^o'^^g^'anVthei^^hlre' 
a  notice  signed  by  the  president  or  secretary,  showing:        holdings. 

1 .  The  names  of  the  directors  of  such  bank. 

2.  The  number  and  the  par  value  of  the  shares  of 
stock  held  by  each  director. 

The  entries  on  such  book  and  such  notice  shall  be  made  Entries  on  such 

book  and  notice  to 

and  posted  within  twenty-four  hours  after  any  transfer  be  posted  within  24 

f       .  •  1  •  1      hours  after  stock 

of  stock,  and  shall  be  prima  facie  evidence  against  each  transfer. 
director  of  the  number  of  shares  of  stock  held  by  each. 

[Publishers'   note,  re   Section  17,   as   amended  1921: 

This  amendment  eliminates  the  requirement,  in  the  old  section,  that  the  bank 
shall  keep  a  book  containing  a  record  of  stockholders  and  the  number  of  shares 
held  by  each,  in  a  conspicuous  place  in  its  office.] 

(Section    18.      Repealed  1913.) 

Section  1  9.     The  aggregate  of  paid-up  capital  together  percentage  of  paid- 

,  ,  .  -Ill  1    up  capital  and  surplus 

With  the  surplus,  of  every  commercial  bank,  must  equal  to  deposits  of 
the  following  percentages  of  its  deposit  liabilities: 

(a)  Ten  per  centum  of  any  amount  up  to  and  includ- 
ing two  million  dollars. 

(b)  Seven  and  one-half  per  centum  of  any  amount  in 
excess  of  two  million  dollars  up  to  and  including  five 
million  dollars. 

(c)  Five  per  centum  of  any  amount  in  excess  of  five 
million  dollars. 

The  aggregate  of  paid-up  capital  together  with  the  sur-  percentage  of  paid-up 

f  f  .  Ill-  'i.!!.!  Ji.U        capital  and  surplus  of 

plus  or  every  savings  bank  having  a  capital  stock,  ana  tne  savings  bank  having 

r  ^         r  •  ii'.^l_t  '1.1    capital  stock,  and 

reserve    fund    or    every    savings    bank   without    a    capital  reserve  fund  of 
stock,  must  equal  the  following  percentages  of  its  deposit  capitaf-stock. 
liabilities: 

(d)  Ten  per  centum  of  any  amount  up  to  and  includ- 
ing one  million  dollars. 

[35] 


§  19-20  BLYTH.  WITTER  &   CO. 

(e)  Seven  and  one-half  per  centum  of  any  amount  in 
excess  of  one  million  dollars  up  to  and  including  three 
million  dollars. 

(f)  Five  per  centum  of  any  amount  in  excess  of  three 
million  dollars  up  to  and  including  ten  million  dollars. 

(g)  Two  and  one-half  per  centum  of  any  amount  in 
excess  of  ten  million  dollars  up  to  and  including  twenty- 
five  million  dollars. 

(h)  One  per  centum  of  any  amount  in  excess  of 
twenty-five  million  dollars. 

Restriction  on  in-       The  deposits  shall  HOt  be  increased  if  such  proportion 

crease  of  deposits.       r  ■  i  -ii  i  flil*.. 

of  paid-up  capital  and  surplus  or  reserve  rund  to  deposit 
liabilities  is  not  maintained,  and  in  no  event  shall  said 
paid-up  capital  be  less  than  the  minimum  paid-up  capital 
provided  by  this  act;  provided,  that  such  deposit  liabilities 
Deposit  liabilities  shall  be  exclusive  of  United  States  and  postal  savings  de- 

to  be  exclusive  of  »  c 

governmental  de-  posits  and  deposits  of  the  State  of  California  and  of  any 
county  and  municipality  in  the  State  of  California  which 
are  secured  as  required  by  law. 

[Publishers'  note,  re.   Section  19,  as  amended  1921: 

This  amendment  provides  that  the  aggregate  of  paid-up  capital,  together  with 
the  surplus,  of  every  commercial  bank,  instead  of  being  equal  to  ten  per  cent,  of 
its  deposit  liabilities,  as  was  previously  the  case,  must  equal  the  percentages 
specified  in  subdivisions  (a),  (b)  and  (c)  of  the  section;  and  in  the  case  of  sav- 
ings banks  such  paid-up  capital  and  surplus  must  equal  the  percentages  designated 
in  subdivisions  (d),   (e),   (f),   (g)  and  Ch).] 

Commercial  bank  to       Section    20.      Every   commercial  bank   shall   maintain 

maintain  total  reserves  ,  .  .  ^  •  l       •  c 

against  aggregate  total  rescrves  agamst  its  aggregate  deposits,  exclusive  or 


deposits  as  specified. 


United  States  and  postal  savings  deposits  and  deposits  of 
the  State  of  California  and  of  any  county  and  municipality 
in  the  State  of  California,  which  are  secured  as  required 
by  law,  as  follows: 

1 .  Eighteen  per  centum  of  such  deposits  if  such  bank 
has  its  principal  place  of  business  in  a  city  having  a  popu- 
lation of  one  hundred  thousand  or  over. 

2.  Fifteen  per  centum  of  such  deposits,  if  such  bank 
is  located  in  a  city  having  a  population  of  fifty  thousand 
or  over  and  less  than  one  hundred  thousand. 

[361 


GENERAL  PROVISIONS  §  20 


3,  Twelve  per  centum  of  such  deposits  if  such  bank  is 
located  elsewhere  in  the  State. 

At  least  one-half  of  the  total  reserves  shall  be  main-  ^"^^.^^^^f^^^Hnd  col- 
tained  as  reserves  on  hand  and  shall  consist  of  gold  bul-  Btituted. 
lion  or  any  form  of  money  or  currency  authorized  by  the 
laws  of  the  United  States,  and  the  remainder  of  the  total 
reserves  required  by  the  provisions  of  this  section  shall 
be  maintained  as  reserves  on  deposit  or  as  reserves  on 
hand;  such  reserves  on  hand  to  consist  of  gold  bullion 
or  any  form  of  money  or  currency  authorized  by  the  laws 
of  the  United  States;  provided,  however,  that  all  or  any  ah  or  part  of  re- 

11  -^     J  r*       1    1  11      serves  may  be  de- 

part of  the  reserves  may  be  deposited,   subject  to  call,  posited  with  Federal 

with  a  federal  reserve  bank  in  the  district  in  which  such 

bank  is  located. 

If  any  bank  shall  have  become  a  member  of  a  federal  ^g^^^^f  FeS^RT™' 
reserve  bank,   it  shall  comply  with  the  reserve  require-  serve  Bank  to  comply 

'  ^  •'  with  requirements  of 

ments  of  the  federal  reserve  act  and  its  amendments,  and  Federal  Heserve  Act. 
its  compliance  therewith   shall  be   in   lieu  of,   and   shall 
relieve  such  bank  from  compliance  with,  the  provisions  of 
this  section. 

If  any  bank  shall  not  maintain  the  total  reserves  re-  Penalties  for  not 

,         maintaining  total 

quired  the  superintendent  of  banks  may  impose  a  penalty  reserves  required. 
upon  it,  based  upon  the  length  of  time  such  encroachment 
upon  its  total  reserves  amounting  to  one  per  centum  or 
more  of  its  aggregate  deposits  shall  continue,  at  the  fol- 
lowing rates: 

1 .  At  the  rate  of  six  per  centum  per  annum  upon  any 
such  encroachment  not  exceeding  two  per  centum  of  such 
deposits. 

2.  At  the  rate  of  eight  per  centum  per  annum  upon 
any  additional  encroachment  in  excess  of  two  and  not 
exceeding  three  per  centum  of  such  deposits. 

3.  At  the  rate  of  ten  per  centum  per  annum  upon  any 
additional  encroachment  in  excess  of  three  and  not  ex- 
ceeding four  per  centum  of  such  deposits. 

[371 


§20  BLYTH,  WITTER  &  CO. 


4.  At  the  rate  of  twelve  per  centum  per  annum  upon 
any  additional  encroachment  in  excess  of  four  per  cen- 
tum of  such  deposits. 

Designation  by  Supt.       f^g  Superintendent  of  banks  shall,   in  his  discretion, 

of  depositary  for  "^ 

reserves  on  deposit,  upon  the  nomination  of  any  bank,  designate  a  depositary 
or  depositaries  for  the  reserves  on  deposit  of  such  bank 
provided  for  by  this  act.  Except  as  otherwise  provided 
in  this  section,  such  depositary  shall  be  a  bank  or  na- 
tional banking  association  located  in  this  state.      Every 

Total-reserve  reguire-  .  i-ii  •  ••11  £U* 

ments  for  reserve  reserve  depositary,  which  has  its  principal  place  or  busi- 

depositary.  .  .,..,  |.  .  .        ■>  i-L-i-i. 

ness  in  a  judicial  township  or  m  a  city  located  in  this  state 
in  which  the  population  is  less  than  fifty  thousand,  shall 
have  at  all  times  as  its  total  reserves  an  amount  equal  to 
the  total  reserves  required  by  the  provisions  of  this  sec- 
tion for  every  bank  which  has  its  principal  place  of  busi- 
ness in  a  city  having  a  population  of  fifty  thousand  or 
Requirements  of  bank  over  and  less  than  One  hundred  thousand.     But  no  bank 

or  Natl.  Banking  i  j       • 

Assn.  to  be  desig-  or  national  banking  association  shall  hereafter  be  desig- 
nated as  reserve  de-  i  •       l     ll 

positary.  nated  as  a  depositary  of  any  such  reserves  unless  it  shall 
have  a  combined  capital  and  surplus  of  not  less  than 
the  following  amounts: 

1 .  Two  hundred  fifty  thousand  dollars,  if  located  in 
a  city  which  has  a  population  of  three  hundred  thousand 
or  over; 

2.  Two  hundred  thousand  dollars,  if  located  in  a  city 
which  has  a  population  of  one  hundred  thousand  or  over 
and  less  than  three  hundred  thousand; 

3.  One  hundred  fifty  thousand  dollars,  if  located  in  a 
city  which  has  a  population  of  fifty  thousand  or  over  and 
less  than  one  hundred  thousand; 

4.  One  hundred  thousand  dollars,  if  located  elsewhere 
in  the  state. 

Such  deposiury  may       Such  depositary  may  also  be  a  banking  corporation 

also  be  banking  cor-  ^  j  j 

poration  with  capital  .^^jjjj  ^  capital  and  surplus  of  one  million  dollars  or  more, 

and  surplus  as  '^  ^ 

specified.  Jocated  in  any  city  in  the  United  States. 

[381 


GENERAL  PROVISIONS  §  20 


If  the  total  reserves  of  any  bank  shall  be  less  than  the  Effect  of  impairment 

''  11  •         °^  total  reserves. 

amount  required  by  this  section,  such  bank  shall  not  in- 
crease  its   liabilities   by   making   any   new   loans    or    dis- 
counts,  otherwise  than  by  discounting  bills  of  exchange 
on  sight,   or  by  paying  any  dividends  from  profits  until 
the  full  amount  of  its  total  reserves  has  been  restored. 
The  superintendent  of  banks  may  notify  any  bank  whose  ^^f„„^t^i*^^7rom""  ^°' 
total  reserves  shall  be  below  the  amount  herein  required,  ^^^^-'^H  ^HlZllll^^ 
to  restore  such  total  reserves;  and,  if  it  shall  fail  for  thirty  solvent. 
days  thereafter  to  restore  such  total  reserves,  such  bank 
shall  be  deemed  insolvent  and  may  be  proceeded  against  ^^tTsec-^w.*""^^^ 
under  the  provisions  of  this  act;  provided,  that  all  deposits 
of  money  herein  permitted  or  required  shall  comply  with 
the  provisions  of  section  forty-three  of  this  act. 

The  term,  "reserves  on  hand,"  when  used  in  this  act,  ^Rg^'g^^vrs"^  hand." 
means  the  reserves  against  deposits  kept,  pursuant  to  the 
provisions  of  this  act,  in  the  vault  of  any  bank  or  in  any 
safety  deposit  box  in  any  other  bank  in  this  state,  said 
box  to  be  under  the  exclusive  control  of  the  depositing 
bank. 

The  term,    "reserves  on   deposit,"   when  used   in  this  "Reserves  on  de- 
posit. 

act,  means  the  reserves  against  deposits  maintained  by 
any  bank  pursuant  to  this  act  in  reserve  depositaries,  or 
in  a  federal  reserve  bank  in  the  district  in  which  such 
bank  is  located  and  not  in  excess  of  the  amount  author- 
ized by  this  act. 

The    term,    "total   reserves,"    when    used    in    this   act,    'Total  reserves." 
means  the  aggregate  of  reserves  on  hand  and  reserves  on 
deposit  maintained  pursuant  to  the  provisions  of  this  act. 

The  term,  "reserve  depositary,"  when  used  in  this  act,  "Reserve  depositary.- 
means  a  bank,  trust  company  or  banking  corporation  des- 
ignated by  the  superintendent  of  banks  on  the  nomination 
of  the  depositing  bank  as  a  depositary  for  reserves  on 
deposit. 

[39] 


§  2  1  BLYTH,  WITTER  6c   CO. 


Directors  of  bank       Section  2  1 .     The  directors  of  any  bank  having  a  capi- 

having  capital  stock 

may  declare  and  ^q\  gtock  may,  at  Certain  times,  and  in  such  manner  as  its 

pay  dividends,  as  •'  t     •  i  i  i  • 

specified,  by-laws  prescribe,  declare  and  pay  dividends  to  deposi- 
tors and  stockholders  of  so  much  of  the  profits  of  the 
bank,  and  of  the  interest  arising  from  the  capital,  sur- 
plus and  deposits,  as  may  be  appropriated  for  that  pur- 
pose under  its  by-laws  or  under  its  agreements  with  de- 
positors, but  every  such  bank  shall,  before  the  declara- 
tion of  any  such  dividend,  carry  at  least  one-tenth  part 
of  the  net  profits  of  the  stockholders  for  the  preceding 
half  year,  or  for  such  period  as  is  covered  by  the  divi- 
dend, to  its  surplus,  until  such  surplus  shall  amount  to 
twenty-five  per  centum  of  its  paid-up  capital  stock.  The 
Surplus  convertible  "whole  Or  any  part  of  such  surplus,  if  held  as  the  exclusive 

into  paid-in  capital 

in  which  event  sur-  property  of  the  Stockholders,   may  at  any  time  be  con- 

plus  to  be  restored.   »^       ^         ■' 

verted  into  paid  in  capital,  in  which  event  such  surplus 

shall  be  restored  in  the  manner  above  provided  until  it 

amounts  to  twenty-five  per  centum  of  the  aggregate  paid- 

Loses  sustained  in  up   capital  stock.      Subject  to   the  provisions   of  section 

excess  of  undivided       x-  r-  j 

profits  may  be  nineteen  of  this  act,  any  losses  sustained  by  any  such  bank 

charged  to  and 

paid  from  surplus,  Jn  excess  of  its  Undivided  profits  may  be  charged  to  and 


etc. 

paid  from  its  surplus,  in  which  event  such  surplus  shall 
be  restored  in  the  manner  above  provided,  to  the  amount 
required  by  law;  provided,  however,  that  any  bank  which 
has  invested  any  portion  of  its  surplus  in  its  bank  prem- 
ises, furniture  and  fixtures,  vaults,  or  safe  deposit  vaults, 
and  boxes  necessary  or  proper  to  carry  on  its  banking 
business  shall  not  be  permitted  to  charge  any  loss  to  that 
portion  of  its  surplus  so  invested.  A  larger  surplus  may 
be  created  and  nothing  herein  contained  shall  be  con- 
priority  of  security  strued  as  prohibitory  thereof.     The  capital  and  assets  of 

over  stockholders.  iii  -.ii  •■.  J..1 

any  such  bank  are  a  security  to  depositors  and  stock- 
holders, depositors  having  the  priority  of  security  over 
stockholders. 

Preference  to  depos-       Section  2  1  a.      No  bank,  banker,  or  bank  officer,  shall 

itor  or  creditor  pro- 
hibited, except  as  give  perference   to   any  depositor  or  creditor   except   as 

otherwise  author-  iii  -iiL 

ized;  otherwise  authorized  by  law;  provided,  that  any  commer- 

[40] 


GENERAL  PROVISIONS  §21j 


cial  bank  or  commercial  department  of  a  departmental 
bank,  is  authorized  and  empowered  for  temporary  pur-  providedcommer- 
poses,  to  borrow  money,  or  to  borrow  money  and  pledge  ^^^  mTn^e^and''"' 
or  hypothecate  as  collateral   security   therefor,    its  assets  fn'a^ount  and  upo^n 
not  exceeding  fifty  per  centum  in  excess  of  the  amount  '^•""litions  specified. 
borrowed,  but  only  to  the  extent  and  upon  terms  and  con- 
ditions as  follows: 

(  1  )    Any  amount  up  to,  but  not  exceeding  the  amount  Not  exceeding  cap- 

^     '  -'  "^  ^         ital  and  surplus; 

of  its  capital  and  surplus,  without  consent  of  the  superin-  provisos  as  to  ei- 

^  "^  cess  loans. 

tendent  of  banks;  provided,  however,  that  any  amount 
borrowed,  except  as  otherwise  provided  in  this  section, 
in  excess  of  the  amount  of  its  capital  and  surplus,  at  such 
time  actually  paid  in  and  remaining  undiminished  by 
losses  or  otherwise,  must  first  be  approved  in  writing  by 
the  superintendent  of  banks;  provided,  also,  that  no  ex- 
cess loan  made  to  any  such  bank  shall  be  invalid  or  illegal 
as  to  the  lender,  even  though  made  without  the  consent 
of  the  superintendent  of  banks;  provided,  also,  that  the 
rediscounting  with  or  without  guarantee  or  endorsement 
with  a  federal  reserve  bank,  of  notes,  drafts,  bills  of  ex- 
change and  loans  secured  by  obligations  of  the  United 
States,   is  hereby  authorized  and  shall  not  be  limited  by  Rediscounting,  notes, 

•'  loans,  etc.,  with 

the  terms  of  this  act,  and  shall  not  be  considered  as  bor-  Federal  Reserve 

bank  not  borrowed 

rowed  money  within  the  meaning  of  this  section.  money. 

(2)  Any    amount   of   California,    state,    county,    city,  f"^]''^  """^eys  or 

\     ^  -^  .  r       funds  of  State  and 

city  and   county   funds,    or   any   other   public   money,    in  its  subdivisions. 
the  manner  it  is  or  may  be  authorized  by  law  to  borrow 
and  receive  such  public  money  on   deposit  without  the 
approval  of  the  superintendent  of  banks. 

(3)  Any  amount  of  the   United  States   moneys   and  tt.  s.  moneys  and 

V      '  •'  postal  savings  and 

postal  savings  moneys  of  the  United  States,  and  receive  P|fj^//u^s.^ laws'"' 
such  moneys  on  deposit,  and  pledge  or  hypothecate  such 
of  its  securities  and  upon  such  terms  as  may  be  required 
by  the  laws  of  the  United  States  or  the  rules  and  regula- 
tions of  the  secretary  of  the  treasury  of  the  United  States, 
without  the  approval  of  the  superintendent  of  banks. 

[41] 


§2  la -2 2  BLYTH.  WITTER  &   CO. 

^"r°H/»°J^  ?;>,!;       (4)    Any  amount,  in  addition  to  the  amounts  author- 

bonds  and  other  \      ^  ^  » 

u.  s.  obligations,  j^ed  to  be  borrowed  in  this  section,  for  the  purpose  of 
buying  from  the  United  States,  United  States  bonds, 
United  States  treasury  certificates,  or  notes  or  obligations 
of  the  United  States. 

Rediscounting with        (5)    To  rediscount  with  and  sell  to  a  federal  reserve 

Federal  Reserve 

banknotes,  etc.,  as  bank  any  and  all  such  notes,   drafts,   bills  of  exchange, 

specified. 

acceptances  and  any  other  securities,  with  no  other  re- 
strictions, and  as  fully,  and  to  the  same  extent  as  this 
privilege  is  given  to  national  bank  members  under  the 
terms  of  the  federal  reserve  act,  or  by  regulations  of  the 
federal  reserve  board  made  pursuant  thereto. 

[Publishers'  note,  re  Section  21a,   as  amended  1921: 

The  above  is  a  re-enactment,  unchanged,  of  the  introductory  paragraph:  and 
subdivisions  (1),  (2),  (3),  (4)  and  (5)  of  Section  21a  as  amended  in  1919,  and 
omits  subdivisions  (6),  (7)  and  (8)  of  the  1919  amendment,  which  are,  however, 
re-enacted  in  the  next,  new  section,   as  21b.] 

Partial  payments       Section   21b.     ( 1  )    No   bank   shall   make  partial   pay- 

upon  deposit. 

ments  upon  any  certificate  of  deposit. 

90-day  overdraft  (2)  In  no  case  shall  an  overdraft  of  more  than  ninety 
days'  standing  be  allowed  as  an  asset  of  any  bank. 

Debt  due  commercial        (3)    Any  debt  due  to  any  commercial  bank,  on  which 

bank,  when  bad  . 

debt,  interest  is  past  due  and  unpaid  for  the  period  of  one  year, 
unless  the  same  is  well  secured,  and  is  in  process  of  col- 
lection, shall  be  considered  a  bad  debt  and  shall  be 
charged  off  to  the  profit  and  loss  account  at  the  expira- 
tion of  that  time. 

[Publishers'  note,  re  Section  21b,  re-enacting,  1921,  as  a  separate  section,  un- 
changed, the  last  three  subdivisions  of  Section  21a,  as  amended  in  1919.  See 
publishers'   note  to  Section  21a,   above.] 

authorizeTma^'com"       Section  22.     Any  corporation  authorized  by  its  articles 
bine  business  of  of  incorporation  so  to  do,  may  combine  the  business  of 

commercial  and  sav-  '' 

ings  banks  and  trust  a  commercial  bank  and  savings  bank  and  trust  company, 

company,  etc.  ^  r        j  i 

or  any  one  or  more  or  all  of  them;  provided,  that  no  cor- 
poration authorized  to  transact  a  trust  business  and  which 
is  also  organized  to  engage  in  the  business  of  title  insur- 
ance, shall  engage  in  or  combine  the  business  of  a  com- 
mercial bank  or  savings  bank. 

[421 


GENERAL  PROVISIONS §^ 

Section  23.  When  a  bank  desires  to  do  a  departmental 
business,  it  shall  first  obtain  the  consent  of  the  superin-  do7nTdepar'tm°ntal 
tendent  of  banks,  and  in  its  application  therefor,  file  a  t'^^inesss. 
statement  making  a  segregation  of  its  capital  and  surplus 
for  each  department.  Such  capital  and  surplus,  when  so 
apportioned  and  approved  by  the  superintendent  of 
banks,  shall  be  considered  and  treated  as  the  separate 
capital  and  surplus  of  such  department  as  if  each  depart- 
ment was  a  separate  bank.  Thereafter  a  bank  may,  from 
time  to  time,  with  the  previous  consent  and  approval  of 
the    superintendent    of    banks    and    subject    to    the    pro-  Apportionment  and 

(■  ^.  .        .  £    .  1   •  1.        I  segregation  of  capi- 

visions  or  section  nineteen  or  this  act,  change  any  segre-  tai  and  surplus  of 
gation  and  apportionment  of  capital  and   surplus  previ- 
ously made  and  make  a  new  segregation  and  apportion- 
ment of  its  capital   and   surplus.      Every  bank  hereafter 
organized  doing  a  departmental  business  shall  have  paid  fe^^^i^emTnu!^^  '^°'^ 
up,  in  cash,  capital  stock  as  follows: 

(a)  In  any  locality  in  which  the  population  does  not 
exceed  five  thousand  persons,  not  less  than  twenty-five 
thousand  dollars  if  it  transacts  both  a  commercial  and 

savings  business,  or  not  less  than  one  hundred  twenty-five  where  population  not 
thousand  dollars  if  it  transacts  both  a  commercial  and 
trust  business,  or  not  less  than  one  hundred  twenty-five 
thousand  dollars  if  it  transacts  both  a  savings  and  trust 
business  and  not  less  than  one  hundred  twenty-five  thou- 
sand dollars  if  it  transacts  a  commercial,  savings  and  trust 
business. 

(b)  In  any  city  in  which  the  population  is  more  than  ^^il^i"!  P°?^i^*^°'' 

5,000  to  25,000. 

five  thousand  persons,  but  does  not  exceed  twenty-five 
thousand  persons,  not  less  than  fifty  thousand  dollars  if  it 
transacts  both  a  commercial  and  savings  business,  or  not 
less  than  one  hundred  fifty  thousand  dollars  if  it  transacts 
both  a  commercial  and  trust  business,  or  not  less  than 
one  hundred  fifty  thousand  dollars  if  it  transacts  both  a 
savings  and  trust  business,  and  not  less  than  one  hundred 
fifty  thousand  dollars  if  it  transacts  a  commercial,  sav- 
ings and  trust  business. 

[43] 


§  23  BLYTH,  WITTER  &  CO. 

S'o^o  to°  loo^ooo!  (*^)  ^"  ^^y  ^^'y  ^^  which  the  population  is  more  than 
twenty-five  thousand  persons  but  does  not  exceed  one 
hundred  thousand  persons,  not  less  than  one  hundred 
thousand  dollars,  if  it  transacts  both  a  commercial  and 
savings  business,  or  not  less  than  two  hundred  thousand 
dollars  if  it  transacts  both  a  commercial  and  trust  busi- 
ness, or  not  less  than  two  hundred  thousand  dollars  if  it 
transacts  both  a  savings  and  trust  business,  and  not  less 
than  two  hundred  thousand  dollars  if  it  transacts  a  com- 
mercial, savings  and  trust  business. 

100  ooVto^20o*ooo  ^^^  ^^  ^"y  ^'*-y  ^"  which  the  population  is  more  than 
one  hundred  thousand  persons  but  does  not  exceed  two 
hundred  thousand  persons,  not  less  than  two  hundred 
thousand  dollars,  if  it  transacts  both  a  commercial  and 
savings  business,  or  not  less  than  four  hundred  thousand 
dollars  if  it  transacts  both  a  commercial  and  trust  busi- 
ness, or  not  less  than  four  hundred  thousand  dollars  if  it 
transacts  both  a  savings  and  trust  business,  and  not  less 
than  four  hundred  thousand  dollars  if  it  transacts  a  com- 
mercial, savings  and  trust  business. 

^xceeds^20Moo  (^)  ^^  ^"X  ^^^Y  ^^  which  the  population  exceeds  two 
hundred  thousand  persons,  not  less  than  three  hundred 
thousand  dollars  if  it  transacts  both  a  commercial  and 
savings  business,  or  not  less  than  five  hundred  thousand 
dollars  if  it  transacts  both  a  commercial  and  trust  busi- 
ness, or  not  less  than  five  hundred  thousand  dollars  if  it 
transacts  both  a  savings  and  trust  business,  and  not  less 
than  five  hundred  thousand  dollars  if  it  transacts  a  com- 
mercial, savings  and  trust  business. 

ti\ff  nofa^ppUcaWe  The  foregoing  classification  shall  not  apply  to  any 
**  bank^inciuded  by  bank  already  in  existence  which  has  received  from  the 
annexation  in  larger  superintendent  of  banks  a  Certificate  to  do  a  banking 
business;  nor  to  any  bank  the  location  of  which  shall 
have  been  included  by  annexation  or  consolidation  within 
the  limits  of  a  city  of  a  class  requiring  a  larger  capitaliza- 
tion,  but  no  bank  thus  excepted  shall  be  permitted   to 

[44] 


GENERAL  PROVISIONS  §  23 


establish  any  new  branch  office  as  provided  in  section 
nine  of  this  act  or  to  remove  its  place  of  business  from 
the  original  limits  of  the  city  or  township  wherein  it  was 
located  prior  to  such  annexation  or  consolidation  until  it 
shall  have  the  capital  required  of  banks  in  such  city  not 
within  said  exception.  Such  excepted  banks  may  not  in 
any  case  decrease  their  capital  stock  but  may  increase  the 
same  in  the  manner  provided  by  law  to  an  amount  either 
greater  or  less  than  that  required  of  banks  in  such  city 
not  within  said  exception.  The  capital  stock  referred  to 
herein  shall  be  increased  from  time  to  time  and  to  the 
same  extent  as  provided  for  in  section  nineteen  of  this 
act. 

Nothing   herein    contained   shall    prevent   the   superin-  supt.  may  grant 

=•  "^  _  license  to  bank  hero- 

tendent  of  banks  in  the  exercise  of  his  discretion  from  after  organized  in  lo- 
cality included  oy 
granting  his  license  to  any  bank  hereafter  organized  in  a  annexation,  etc.,  as 

1111  •  specified. 

locality  which  has  been  included  by  annexation  or  con- 
solidation within  the  limits  of  a  city  requiring  a  larger  cap- 
italization with  a  capital  stock  paid  up  in  cash  equal  to 
that  which  would  have  been  required  for  said  locality  if 
it  had  not  been  included  by  annexation  or  consolidation 
within  the  limits  of  a  city  requiring  a  larger  capitalization;  ^^h\"t''"g°3"^bUsh 
provided,  that  no  bank  so  licensed  shall  be  permitted  to  branch  office. 
establish  any  branch  office  as  provided  in  section  nine  of 
this  act  or  to  remove  its  place  of  business  from  the  orig- 
inal limits  of  the  city  or  township  which  has  been  included 
by  annexation  or  consolidation  within  the  limits  of  a  city 
requiring  a  larger  capitalization  until  it  shall  have  the  cap- 
ital required  of  banks  in  such  city  requiring  said  larger 
capitalization. 

For  the  purposes  of  this  act,  the  population  shown  and  Population,  for  pur- 

*^  poses  of  Act — now 

determined  by  the  last  preceding  federal  census,  or  any  determined. 
subsequent  census  compiled  and  certified  under  any  law 
of  this  state,  shall  be  deemed  to  be  the  population  of  any 
city  in  which  any  such  bank  is  to  be  organized.  If  the 
principal  place  of  business  of  any  bank  so  organized  is 
located  outside  of  the  corporate  limits  of  any  city,  then 

[451 


§  23-24a  BLYTH.  WITTER  &  CO. 


the  population  of  that  portion  of  the  judicial  township  in 
which  said  bank  is  to  have  its  principal  place  of  business, 
which  is  not  included  within  the  boundaries  of  any 
municipal  corporation,  as  such  population  is  shown  and 
determined  by  such  federal  or  subsequent  official  census, 
shall  be  the  basis  for  classification  under  the  provisions  of 
this  act. 

[Publishers'  note,  re  Section  23,  as  amended  1921: 

This  amendment  consists  in  the  insertion  of  a  paragrapn  preceding  the  last 
paragraph,  providing  that  the  superintendent,  in  his  discretion,  may  grant  a 
license  to  a  bank  hereafter  organized  in  a  locality  which  has  been  included  by 
annexation  or  consolidation,  within  the  limits  of  a  city  requiring  a  larger  cap- 
italization, with  a  capital  stock  equal  to  that  which  would  have  been  required  if 
the  locality  had  not  been  annexed  or  consolidated;  but  no  such  bank  shall  have  a 
right  to  establish  a  branch  office  or  to  remove  its  place  of  business  from  the  ori- 
ginal limits  of  the  city  or  township  which  has  been  included  by  annexation  or 
consolidation,  until  it  shall  have  the  capital  required  of  banks  in  the  city  re- 
quiring a  larger  capitalization.] 


Section   24.      Every  bank,  before  it  commences  to  do 
business  or  before  it  opens  a  new  department  and  com- 


Bank  before  com- 
mencing business  or 
opening  new  depart- 
ment shall  obtain  ,         .  .  -i  i  j  . 

certificate  of  supt.,  mences  to  transact  business  in  or  under  sucri  new  depart- 


etc. 


ment,  shall  obtain  the  certificate  of  the  superintendent  of 
banks  for  the  opening  of  each  of  the  departments  speci- 
fied. Each  certificate  herein  provided  for  shall  be  given 
when  the  superintendent  shall,  by  the  examination  re- 
quired by  this  act,  have  satisfied  himself  that  the  proper 
amount  of  cash  has  been  paid  in  as  capital  and  the  pro- 
visions of  this  act  complied  with.  The  applicant  shall 
pay  for  the  certificate  for  each  department  a  fee  of  fifty 
dollars. 

Supt.  to  adopt       Section  24a.     The  superintendent  of  banks  shall  adopt 

an   official   seal.      Every  paper  executed  by  him  as  such 

superintendent   of  banks   in   pursuance   of  any   authority 

Effect  as  evidence  conferred   on   him  by   law,    and   sealed   with   his   seal    of 

of  papers  executed  •'  j     j 

by  Supt.  office,  shall  be  received  in  evidence,  and  may  be  recorded 
in  the  proper  recording  offices  in  the  same  manner  and 
v/ith  the  same  effect  as  a  deed  regularly  acknowledged. 

Fees  chargeable  by       Whenever  it  is  proper  to  furnish  a  copy  of  any  paper 

Supt.  for  copies,  etc.  .  .-  , 

filed  in  the  state  banking  department  and  to  certity  such 
paper,  except  where  such  copy  or  certification  is  made  for 
the  benefit  of  a  corporation  to  which  this  act  is  applicable, 

[461 


GENERAL  PROVISIONS  §  24a-26 

the  superintendent  of  banks  may  charge  ten  cents  per 
folio  for  each  such  copy,  and  for  affixing  his  official  seal 
on  such  copy  and  certifying  the  same,  one  dollar. 

[Publishers'   note,   re   Section  24a,   new,   enacted   1921 : 

This  section  provides  that  the  superintendent  shall  adopt  an  official  seal,  and 
the  papers  executed  by  him  in  pursuance  of  authority  conferred  by  law  and  sealed 
with  the  seal  of  his  office,  shall  be  received  in  evidence  and  may  be  recorded  as 
a  deed  regularly  acknowledged. 

The  superintendent  is  authorized  to  make  a  charge  of  10  cents  a  folio  for 
copies  of  any  paper  filed  in  the  State  Banking  Department,  and  a  fee  of  $1.00  for 
certifying  the  same,  except  where  the  copy  or  certification  Is  made  for  the  bene- 
fit of  a  corporation  to  which  this  Act  is  applicable.] 

Section    25.      Every  bank  shall  maintain  for  each  de-  Bank  to  maintain 
partment  total  reserves  equal  in  amount  to  that  required  total  reserve^!'  ^ 
by   this   act   for   the   respective   business   conducted,    and 
shall  keep  separate  and  distinct  the  total  reserves  of  any 
department  from  that  of  any  other  department;  and  all 
deposits  made  with  other  banks,  whether  temporary  or  Deposits  by  depart- 

1  .  ,      ,,    ,  i-      ,  .  ,  ment  with  other 

otherw^ise,  shall  be  assets  of  the  respective  departments  banks— how  treated. 
by  which  they  were  made,  and  shall  be  so  carried  on  the 
books  of  such  other  banks,  and  shall  be  repaid  only  upon 
the  order  of  the  department  to  whose  credit  they  stand. 
No  department  shall  receive  deposits  from  any  other  de- 
partment of  the  same  corporation ;  except  that  a  trust 
department,  in  proper  cases,  may  make  deposits  of  trust 
or  any  other  funds  under  its  control  with  the  savings  de- 
partment or  the  commercial  department,  of  the  same  cor- 
poration; provided,  however,  that  any  bank  having  de- 
partments shall  have  the  right  to  sell  and  transfer  any 
bonds,  securities  or  loans  from  one  department  to  another 
upon  receipt  of  the  actual  value  thereof,  if  such  bonds, 
securities  or  loans  are,  under  the  provisions  of  this  act,  s^o°ifa'nd\ranTf7rred 
a  legal  investment  for  the  department  purchasing  the  tr^oTher.^^^'*""^"* 
same. 

[Publishers'   note,   re   Section  25,   as  amended  1921: 

This  section  previously  authorized  a  trust  department  to  make  deposit  of  trust 
or  other  funds  with  the  savings  department,  and,  upon  authorization  of  a  proper 
court,  with  the  commercial  department.  The  amendment  permits  the  trust  de- 
partment to  make  deposits  with  the  commercial  department  without  authorization 
of  court.] 

Section    26.     Every  bank  having  different  departments  Each  department  to 

hill  lir  r  II  keep  separate  books 

all   keep   separate   books   or   account   ror   each   depart-  and  be  governed  by 

ment  of  its  business,  and  shall  be  governed  as  to  all  de- 
posits, reserves,  investments  and  transactions  relating  to 

[47] 


provisions  of  Act. 


§  26-28  BLYTH,  WITTER  &  CO. 


each  department  by  the  provisions  of  this  act  specifically 
provided  for  the  respective  kind  of  business. 

It  shall  keep  all  investments  relating  to  the  savings 
department  entirely  separate  and  apart  from  the  invest- 
ments of  its  other  department  or  departments. 

Every  bank  shall  conduct  the  business  of  all  its  depart- 
ments in  one  building,  or  in  adjoining  buildings;  pro- 
vided, that  any  departmental  bank,  having  a  trust  depart- 
ment, may  conduct,  with  the  previous  written  consent  of 
the  superintendent  of  banks,  the  business  of  its  trust  de- 
Trust  department  partment  in  a  building  separate  from  its  principal  place 

may  be  conducted  ^  =         » 

in  separate  building.  qJ  busincss  in  the  same  city  in  which  its  principal  place  of 
business  is  located. 
Mingling  of  cash,        Every  bank  shall  keep  entirely  separate  and  apart  in 

securities,  etc.,  •'  ill 

forbidden,  g^^h  department  the  cash,  securities  and  property  belong- 
ing to  such  department,  and  shall  not  mingle  the  cash, 
securities  and  property  of  one  department  with  that  of 
another. 

[Publishers'  note,  re  Section  26,  as  amended  1921: 

This  amendment  permits  the  trust  department  of  a  departmental  bank,  with 
the  previous  written  consent  of  the  superintendent,  to  be  conducted  in  a  separate 
building  in  the  same  city,  instead  of  in  one  building  or  in  adjoining  buildings,  as 
previously   provided.] 

Moneys  and  assets       Section   2  7.     All  money  and  assets  belonging  to  each 

of  each  department  •ii'Ll  J 

held  for  repayment  department,  whether  on  hand  or  with  other  banks,  and 
etc'  the  investments  made,  shall  be  held  solely  for  the  repay- 
ment of  the  depositors  and  other  claimants  of  each  such 
department,  as  herein  provided,  until  all  depositors  and 
other  claimants  of  each  such  department  shall  have  been 
paid,  and  the  overplus  then  remaining  shall  be  applied 
to  any  other  liabilities  of  such  bank. 

Every  bank  must  on       Section  28.     Every  bank  in  this  state  must,  on  its  prin- 

signs,  advertising,  -^  ,         .  . 

etc.,  specify  its  cipal  place  of  business  and  on  all  communications  to  de- 
business — "savings,"       ^  i         r   •       i  1^       ai  U  J 

"trust"  or  "commer-  positors,  and  on  each  of  its  branch  ornces,  use  the  word 
"savings"  if  it  conducts  a  savings  business,  and  the  word 
"trust"  if  it  conducts  a  trust  business,  and  the  word 
"commercial"  if  it  conducts  a  commercial  business.  Every 
vertising  refuirfmLt  bank  which  maintains  a  branch  office  must  on  all  win- 
dow signs   and   in   advertising,    and   on   letterheads   and 

[48] 


GENERAL  PROVISIONS  §  28-29 


other  stationery  on  which  the  business  of  said  branch 
office  is  transacted,  use  in  letters  and  type,  equal  in 
prominence  to  that  used  in  its  corporate  name,  the  word 
"branch"  and  the  name  of  the  place  where  its  principal 
business  is  located ;  provided,  that  any  such  bank  may  on 
all  window  signs  and  in  advertising,  and  on  letter  heads 
and  other  stationery  of  such  branch  offices  as  are  located 
in  the  city  where  the  principal  place  of  business  of  such 
bank  is  located,  use  in  letters  and  type,  equal  in  prominence 
to  that  used  in  its  corporate  name,  the  word  "branch"  or 
the  word  "office,"  and  the  designation  by  street  and  num- 
ber of  the  place  where  its  principal  business  is  located. 

[Publishers'   note,   re   Section  28,   as  amended  1921; 

This  section,  previous  to  its  amendment  as  above,  provided  that  the  words 
"savings,"  "trust"  and  "commercial,"  if  the  respective  businesses  are  trans- 
acted, must  appear  on  all  the  bank's  window  signs,  and  in  advertising  and  on 
letterheads  and  other  stationery  on  which  its  business  is  transacted. 

The  amendment  provides  that  these  words  must  be  carried  on  the  bank's 
principal  place  of  business,  and  on  all  communications  to  depositors,  and  on  each 
of  its  branch  offices. 

The  amendment  adds  an  additional  paragraph  providing  that  the  word 
"office,"  with  the  designation  by  street  and  number  of  the  principal  place  of 
business,  may  be  carried  on  all  window  signs  and  in  advertising  and  on  letter- 
heads and  other  stationery  of  such  branch  offices  as  are  located  in  the  city  where 
the  principal  place  of  business  of  the  bank  is  located.] 

Section   29.       Every    corporation    heretofore    created  Bank  without  capx- 

J  ^  .  tal  stock  may  convert 

under  the  laws  of  this  state,  doing  a  banking  business  into  stock  company. 
therein,  and  which  has  no  capital  stock,  may  elect  to 
have  a  capital  stock,  and  may  issue  certificates  of  stock 
therefor,  in  the  same  manner  as  corporations  formed 
under  the  provisions  of  Part  IV,  Title  I,  Chapter  I,  Article 
I,  of  the  Civil  Code,  relating  to  the  formation  of  corpora- 
tions; provided,  that  no  such  corporation  shall  use  or 
convert  any  moneys  or  funds  theretofore  belonging  to  it, 
or  under  its  control,  into  capital  stock;  but  such  funds  or 
moneys  must  be  held  and  managed  only  for  the  purposes 
and  in  the  manner  for  which  they  were  created.     Before  Prerequisites  to 

such  conversion. 

such  change  is  made,  a  majority  of  the  members  of  such 
corporation  present  at  a  meeting  called  for  the  purpose  of 
considering  the  proposition  whether  it  is  best  to  have  a 
capital  stock,  its  amount,  and  the  number  of  shares  into 
which  it  shall  be  divided,  must  vote  in  favor  of  having 

[49] 


§29-31  BLYTH.  WITTER  &   CO. 

a  capital  stock,  fix  the  amount  thereof,  and  the  number 

of  shares  into  which  it  shall  be  divided.      Notice  of  the 

time  and  place  of  holding  such  meeting,  and  its  object, 

must  be  given  by  the  president  of  such  corporation  by 

mailing  notice  of  such  meeting  to  each  member  of  such 

corporation  at  his  last  known  post-office  address  at  least 

ten  days  prior  to  the  day  fixed  for  such  meeting,  and  by 

publication  in  some  newspaper  printed  and  published  in 

the  county,   or  city  and  county,   in  which   the  principal 

place  of  business  of  the  corporation  is  situated,  at  least 

Certified  copy  of  once  a  Week  for  three  successive  weeks  prior  to  the  hold- 
proceedings,  etc.,  .  ,,  .  .  ,,  ,.  ri. 
to  be  filed  with  Sec-  mg  OF  the  meeting.      A  copy  or  the  proceedings  or  this 

retary  of  State  and  ...■,■,,  < 

county  clerk,  meeting,  givmg  the  number  of  persons  present,  the  votes 
taken,  the  notice  calling  the  meeting,  the  proof  of  its 
publication,  the  amount  of  capital  actually  subscribed, 
and  by  whom,  all  duly  certified  by  the  president  and 
secretary  of  the  corporation,  must  be  filed  in  the  office  of 
the  secretary  of  state  and  clerk  of  the  county  where  the 
Effect  of  proceed-  articles  of  incorporation  are  filed.      Thereafter  such  cor- 

ings.  ^ 

poration  is  possessed  of  all  the  rights  and  powers,  and 
is  subject  to  all  the  obligations,  restrictions,  and  limita- 
tions, as  if  it  had  been  originally  created  with  a  capital 
stock. 

Safe  deposit  de-  Section  30.  Any  bank  may  conduct  a  safe  deposit 
department,  but  shall  not  invest  more  than  one-tenth  of 
its  capital  and  surplus  in  such  safe  deposit  department. 

Business  of  bank       Section    3 1 .      Any   bank    may    sell    the    whole    of   its 

or  of  department 

may  be  sold  to  business  or  the  whole  of  the  business  of  any  of  its  de- 
other  bank. 

partments  to  any  other  bank  which  may  purchase  such 

business  after  obtaining  the  consent  of  the  stockholders 

of  the  selling  and   of  the  purchasing  banks  holding   of 

record  at  least  two-thirds  of  the  issued  capital  stock  of 

each  of  such  corporations;  such  consent  to  be  expressed 

either   in   w^riting   executed   and   acknowledged   by   such 

stockholders  and  attached  to  the  instrument  of  sale,  or  to 

a  copy  thereof,  or  by  vote  at  a  stockholders'  meeting  of 

[50] 


GENERAL  PROVISIONS §_3j 

each  of  such  banks  called  for  that  purpose.  The  selling  f„tf4^e"mrtTf 
and  purchasing  banks  must  for  such  purposes  enter  into  gpicXd* pr"ovUioiui. 
an  agreement  of  sale  and  purchase,  which  agreement 
shall  contain  all  the  terms  and  conditions  connected  with 
such  sale  and  purchase.  Such  agreement  shall  contain 
proper  provision  for  the  payment  of  liabilities  of  the 
selling  bank  or  of  the  department  sold,  and  the  assump- 
tion by  the  purchasing  bank  of  all  fiduciary  and  trust  obli- 
gations of  the  selling  bank  or  department  sold,  and  in 
these  particulars  shall  be  subject  to  the  approval  of  the 
superintendent  of  banks;  and  shall  not  be  valid  until  such 
approval  is  obtained.  Such  agreement  may  contain  pro- 
visions for  the  transfer  of  all  deposits  to  the  purchasing 
bank,  subject,  however,  to  the  right  of  every  depositor 
of  the  selling  bank  to  withdraw  his  deposit  in  full  on  de- 
mand after  such  transfer,  irrespective  of  the  terms  under 
which  it  was  deposited  with  the  selling  bank;  and  such 
agreement  may  also  contain  provisions  for  the  transfer  of 
all  court  and  private  trusts  to  the  purchasing  bank,  sub- 
ject, however,  to  the  right  of  trustors  and  beneficiaries, 
after  such  transfer,  to  nominate  another  and  succeeding 
trustee  of  the  trusts  so  transferred.  The  rights  of  cred- 
itors of  the  selling  bank  shall  not  in  any  manner  be 
impaired  by  any  such  sale,  nor  shall  any  liability  or 
obligation  for  the  payment  of  any  money  due  or  to  be- 
come due,  or  any  claim  or  demand,  in  any  manner,  or 
for  any  cause  existing  against  such  selling  bank  or  against  purchasing  bank 

11,11  r      ^         •  1J  succeeds  to  rights 

any  stockholder  thereof,  be  in  any  manner  released  or  and  obligations  of 
impaired,  and  all  the  rights,  obligations  and  relations  of 
all  the  parties,  creditors,  depositors,  trustors  and  bene- 
ficiaries of  trusts  shall  remain  unimpaired  by  the  sale,  but 
such  bank  to  which  the  other  shall  sell  all  its  business  or 
all  the  business  of  any  of  its  departments,  shall  succeed 
to  all  such  relations,  obligations,  trusts  and  liabilities  and  i^*^°^'i^|"'"'"  """'" 
be  held  liable  to  pay  and  discharge  all  such  debts  and  lia- 
bilities and  to  perform  all  such  trusts  of  the  selling  bank 
in  the  same  manner  as  if  such  bank  to  which  the  other  had 

[511 


§  3  I  BLYTH.  WITTER  &  CO. 

sold  had  itself  incurred  the  obligation  or  liability  or  as- 
sumed the  relation  of  trust,  and  the  stockholders  of  the 
respective  corporations  so  entering  into  such  agreement 
shall  continue  subject  to  all  the  liabilities,  claims  and  de- 
mands existing  against  them  as  such  at  or  before  such  sale. 
Immediately  after  the  execution  of  such  agreement  of 
Notice  of  sale  to  be  g-^jg  g^j^j  purchase  notice  thereof  shall  be  published  for  at 

published.  ^  '^ 

least  four  successive  weeks  in  a  newspaper  in  each  of  the 
counties  of  the  state  in  which  either  of  such  banks  shall 
have  its  principal  place  of  business;  provided,  however, 
that  no  action  can  be  brought  against  such  selling  bank 
or  any  of  its  stockholders  on  account  of  any  deposits, 
obligations,  trusts  or  liabilities  so  transferred  after  the  ex- 
piration of  one  year  from  the  last  day  of  publication 
Limitation  of  actions,  herein  required ;  and  provided,  further,  that  such  selling 
bank  shall  maintain  for  a  period  of  one  year  after  the  last 
day  of  publication  herein  required  such  an  amount,  if 
any,  of  capital  or  capital  and  surplus  as  the  superintend- 
ent of  banks,  in  the  exercise  of  his  discretion,  may  deem 
necessary. 

An  affidavit  showing  such  publication  shall  be  filed  in 
the  office  of  the  superintendent  of  banks  within  ten  days 
after  the  last  publication  thereof.  The  affairs  of  such 
selling  bank,  or  selling  department  of  a  bank,  shall  re- 
main subject  to  the  provisions  of  this  act. 

Effect  °gf^^PP''°J^i^}'y  Upon  the  approval  by  the  superintendent  of  banks  of 
an  agreement  of  sale  and  purchase  and  the  transfer  of  the 
business  of  a  trust  department  or  of  a  bank  having  a  trust 
department  the  purchasing  bank  shall,  ipso  facto  and  by 
operation  of  law  and  without  further  transfer,  substitution, 
act  or  deed,  and  in  all  courts  and  places,  be  deemed  and 
held  to  have  succeeded  and  shall  become  subrogated  and 
shall  succeed  to  all  rights,  obligations,  properties,  assets, 
investments,  deposits,  demands,  contracts,  agreements, 
court  and  private  trusts  and  other  relations  to  any  person, 
creditor,  depositor,  trustor,  principal  or  beneficiary  of  any 

[52] 


GENERAL  PROVISIONS  §  3  I  -3  I  a 

court  or  private  trust,  obligations  and  liabilities  of  every 
nature,  and  shall  execute  and  perform  all  such  court  and 
private  trusts  in  the  same  manner  as  though  it  had  itself 
originally  assumed  the  relation  or  trust  or  incurred  the 
obligation  or  liability. 

[Publishers'  note,  re  Section  31,  as  amended  1921: 

This  amendment  adds,  at  the  close  of  the  next  to  the  last  paragraph,  the  fol- 
lowing sentence: 

"And  provided,  further,  that  such  selling  bank  shall  maintain  for  a  period  of 
one  year  after  the  last  day  of  publication  herein  required  such  an  amount,  if  any, 
of  capital  or  capital  and  surplus  as  the  superintendent  of  banks,  in  the  exercise 
of  his  discretion,  may  deem  necessary,"] 

Section  3  I  a.     Any  bank  incorporated  under  the  laws  state  banks  may 

...  i.  I  .  I  11        consolidate,  upon 

or  this  state  may  consolidate  with  one  or  more   banks  approval  of  Supt. 
incorporated    under    the    laws    of    this    state,    its    capital  stockholders  as 

I  .  1-11  specified. 

stock,  properties,  trusts,  claims,  demands,  contracts, 
agreements,  obligations,  debts,  liabilities  and  assets  of 
every  kind  and  description,  upon  such  terms  and  in  such 
manner  as  may  be  agreed  upon  by  their  respective  boards 
of  directors,  a  copy  of  which  agreement  must  be  filed  in 
the  office  of  the  superintendent  of  banks;  provided,  that 
such  agreement  shall  be  subject  to  the  approval  of  the 
superintendent  of  banks  and  shall  not  be  valid  until  such 
approval  be  obtained;  provided,  further,  that  no  such 
consolidation  shall  take  effect  until  such  agreement  shall 
have  been  ratified  and  confirmed  in  writing  by  the  stock- 
holders of  the  respective  banks  holding  of  record  at  least 
two-thirds  of  the  issued  capital  stock  of  their  respective 
banks,  or  such  agreement  may  be  submitted  to  the  stock- 
holders of  each  of  such  corporations  at  a  meeting  thereof 
to  be  called  upon  notice  specifying  the  time,  place  and 
object  thereof,  addressed  to  each  stockholder  at  his  last 
known  post-office  address  and  deposited  in  the  post- 
office,  postage  prepaid,  at  least  two  weeks  prior  to  the 
date  fixed  for  said  meeting,  and  published  for  at  least 
two  successive  weeks,  prior  to  the  date  of  said  meeting, 
in  a  newspaper  in  each  of  the  counties  of  the  state  in 
which  any  of  such  banks  shall  have  its  principal  place  of 
business,  and  if  such  agreement  shall  be  approved  at 
each    of    such    meetings    of    the    respective    stockholders 

153] 


§3  la  BLYTH.  WITTER  &  CO. 

separately  by  the  vote  or  ballot  of  the  stockholders  own- 
ing at  least  two-thirds  of  the  stock  of  each  such  bank, 
the  same  shall  be  the  agreement  of  such  banks.  In  case 
of  such  consolidation  "articles  of  incorporation  and  con- 
solidation" must  be  prepared,  setting  forth: 
Contents  of  articles:       pjj.s|. — jj^g  name  of  the  new  corporation; 

consolidation.  ^  ' 

Second — The  purpose  for  which  it  is  formed; 

Third — The  place  where  its  principal  business  is  to  be 
transacted ; 

Fourth — The  term  for  which  it  is  to  exist,  which  shall 
not  exceed  fifty  years; 

Fifth — The  number  of  its  directors  (which  shall  not 
be  less  than  three)  and  the  names  and  residences  of  the 
persons  appointed  to  act  as  such  until  their  successors  are 
elected  and  qualified; 

Sixth — The  amount  of  its  capital  stock  and  the  num- 
ber of  shares  into  which  it  is  divided; 

Seventh — The  amount  of  stock  actually  subscribed, 
and  by  whom; 

Eighth — The  names  of  the  constituent  corporations. 
Articles  to  be  exe-       Said  articles  of  incorporation  and  consolidation  must 

cuted  as  specified,  ^ 

be  signed  and  countersigned  by  the  president  and  secre- 
tary of  each  constituent  corporation  and  sealed  w^ith 
their  corporate  seals.  There  must  be  annexed  thereto 
the  approval  of  the  superintendent  of  banks  and  memo- 
randa of  the  ratification  and  confirmation  thereof  by  the 
stockholders  of  each  constituent  corporation,  which  must 
be  respectively  signed  and  acknow^ledged  by  stockholders 
representing  at  least  two-thirds  of  the  capital  stock  of 
their  respective  corporations. 
Articies-with^whom  When  completed  as  aforesaid  said  articles  must  be  filed 
in  the  office  of  the  secretary  of  state  and  a  copy  of  the 
articles  of  incorporation  and  consolidation,  certified  by 
the  secretary  of  state,  must  be  filed  in  the  office  of  the 
county  clerk  of  the  county  in  which  is  located  the  prin- 

[54] 


GENERAL  PROVISIONS  §31-a 


cipal  place  of  business  of  the  new  corporation.  The  sec- 
retary of  state  must  issue  over  the  great  seal  of  the  state 
a  certificate  that  the  articles  of  incorporation  and  consoli- 
dation containing  the  required  statement  of  facts  have 
been  filed  in  his  office.  A  duplicate  of  the  certificate  here- 
inbefore provided  for  must  be  filed  by  the  secretary  of 
state  in  his  office  and  copies  thereof  duly  certified  by  the 
secretary  of  state  shall  have  the  same  force  and  effect  in 
evidence  as  the  original. 

A  copy  of  the  articles  of  incorporation  and  consolida- 
tion, certified  by  said  secretary  of  state,  must  be  filed  in 
the  office  of  the  superintendent  of  banks,  and  also  in  the 
office  of  the  county  clerk  of  each  county  in  which  a  prin- 
cipal place  of  business  of  either  or  any  of  the  constituent 
corporations  was  situated  at  the  time  said  corporation 
was  incorporated.     When    the    superintendent    of    banks  Effect  of  Supt.  issu- 

•  1      1      f  1         ^"^  certificate, 

issues  the  certificate  of  authorization  provided  for  by 
section  one  hundred  twenty-eight  of  this  act  the  new 
or  consolidated  corporation  shall  be  a  body  politic  and 
corporate  by  the  name  stated  in  the  certificate,  and  for 
the  term  of  fifty  years,  unless  it  is,  in  the  articles  of  in- 
corporation and  consolidation,  otherwise  stated  and 
thereupon  each  constituent  corporation  named  in  the 
articles  of  incorporation  and  consolidation  must  be 
deemed  and  held  to  have  become  extinct  in  all  courts 
and  places,  and  said  new  corporation  must  be  deemed 
and  held  in  all  courts  and  places  to  have  succeeded  to  all 
their  several  capital  stocks,  properties,  trusts,  claims,  de- 
mands, contracts,  agreements,  assets,  choses  and  rights 
in  action  of  every  kind  and  description,  both  at  law  and 
in  equity,  and  to  be  entitled  to  possess,  enjoy,  and  en- 
force the  same  and  every  thereof,  as  fully  and  completely 
as  either  and  every  of  its  constituents  might  have  done 
had  no  consolidation  taken  place.  Said  consolidated  or 
new  corporation  must  also,  in  all  courts  and  places,  be 
deemed  and  held  to  have  become  subrogated  to  its  sev- 
eral constituents  and  each  thereof,  in  respect  to  all  their 

[55] 


§31a  BLYTH.  WITTER  &   CO. 

contracts  and  agreements  with  other  parties,  and  all  their 
debts,  obligations,  and  liabilities,  of  every  kind  and 
nature,  to  any  persons,  corporations,  or  bodies  politic, 
whomsoever,  or  whatsoever,  and  said  new  corporation 
must  sue  and  be  sued  in  its  own  name  in  any  and  every 
case  in  which  any  or  either  of  its  constituents  might  have 
sued  or  might  have  been  sued  at  law  or  in  equity  had  no 
such  consolidation  been  made.  Nothing  in  this  section 
contained  shall  be  construed  to  impair  the  obligation  of 
any  contract  to  which  any  of  such  constituents  were  par- 
ties at  the  date  of  such  consolidation.  All  such  contracts 
may  be  enforced  by  action  or  suit,  as  the  case  may  be, 
against  the  consolidated  corporation,  and  satisfaction  ob- 
tained out  of  the  property  which,  at  the  date  of  the  con- 
solidation, belonged  to  the  constituent  which  was  a  party 
to  the  contract  in  action  or  suit,  as  well  as  out  of  any  other 
property  belonging  to  the  consolidated  corporation,  and 
the  stockholders  of  each  constituent  corporation  so  enter- 
ing into  such  agreement  shall  continue  subject  to  all  the 
liabilities,  claims  and  demands  existing  against  them  at 
or  before  such  consolidation  to  the  same  extent  as  if  the 

Eight  of  new  cor-  same  had  not  been  made.      The  right  of  said  new  cor- 
poration to  effect 

organic  changes,  poration  to  increase  or  decrease  its  capital  stock,  to 
change  the  number  of  its  directors,  to  amend  its  articles 
of  incorporation,  to  change  its  principal  place  of  business, 
or  its  name,  or  to  effect  any  other  organic  change  shall 
be  governed  by  the  general  corporation  laws  of  this  state 
and  by  the  bank  act,  and  the  procedure  to  effect  any 
such  change  shall  be  that  defined  by  the  general  corpora- 
tion laws  and  the  bank  act. 

supt.  to  transmit  to       y^g  superintendent  of  banks  shall  transmit  to  the  sec- 

Secy.  of  State  dup-  '^ 

Ucate  of  certificate,  retary  of  State  a  duplicate  of  the  certificate  of  authoriza- 
tion hereinbefore  referred  to  and  the  secretary  of  state 
shall  file  the  same  in  his  office.      The  superintendent  of 

[561 


GENERAL  PROVISIONS  §3Ia-31b 


banks  shall  also  file  a  duplicate  of  such  certificate  in  his 
own  office. 

[Publishers  note,  re  Section  31a,  as  amended  1921: 

The  only  change  from  the  old  section  is  in  the  first  part  of  para^aph 
"Eighth,"  as  to  the  order  of  filing,  in  the  public  offices,  of  articles  of  incorpora- 
tion and  consolidation.] 

Section  31b.     (  1  )  Any  two  or  more  banks,  respectively  Merger  of  two  or 

^      '  -^  _  more  banks  authorized. 

empowered  by  their  articles  of  incorporation,  and  author- 
ized by  the  provisions  of  the  bank  act  to  do  the  business 
of  a  commercial  bank  and  savings  bank  and  trust  com- 
pany, or  any  one  or  more  or  all  of  them,  are  hereby 
authorized  to  merge  one  or  more  of  such  banks  into  an- 
other of  them,  as  hereinafter  provided. 

(2)  The  respective  boards  of  directors  of  such  banks  ^^"'b^;^^^^^";''^'"^* 
may  by  a  majority  vote  of  all  of  the  members  of  each  merging  banks. 
board,  at  a  meeting  duly  called  and  held,  make  or  author- 
ize to  be  made  between  such  banks  a  written  agreement 
in  duplicate  for  the  merger  of  such  banks.  Such  agree- 
ment shall  specify  each  bank  to  be  merged  and  the  bank 
which  is  to  receive  into  itself  the  merging  bank  or  banks, 
and  it  shall  prescribe  the  terms  and  conditions  of  the 
merger  and  the  mode  of  carrying  it  into  effect.  Such 
agreement  may  provide  for  such  and  any  matters  to  ef- 
fect and  accomplish  such  merger,  not  inconsistent  with 
the  provisions  of  the  bank  act  or  the  other  laws  of  this 
state. 

Such  agreement  and  sworn  copies  of  the  proceedings  f-fr^^^^-^t'"* 
of  the  meetings  of  the  respective  boards  of  directors  at  ^"^^^l-J^^f '  *°  ^«  ^^^ 
which   the   making   of   such    agreement   was   authorized, 
shall  be  submitted  in  duplicate  to  the  superintendent  of 
banks  for  his  approval  and  shall  not  be  valid  until  such 
approval  is  obtained. 

Said  merger  shall  not  take  effect  unless  and  until  such  M;/if/^,Yfiefand'c7n. 
merger  agreement  shall  have  been  ratified  and  confirmed  ^'^^,^,|'fi^ef^°"'"'' 
in  writing  by  the  stockholders  of  the  respective  banks 
holding  of  record  at  least  two-thirds  of  the  issued  capital 
stock  of  their  respective  banks,  or  such  merger  agreement 

[57] 


§  31b BLYTH.  WITTER  &  CO. 

MERGER  OF  TWO  may  be  submitted   to   the  stockholders   of   each  of  such 

OR  MORE  BANKS 

—Continued,  banks  at  either  a  regular  or  special  meeting  thereof,  to  be 
duly  called  in  the  manner  provided  in  the  by-laws  of  such 
respective  banks,  or  if  no  manner  for  calling  such  meeting 
is  therein  provided,  then  in  the  manner  prescribed  by 
law;  and  if  such  agreement  shall  be  approved  at  each  of 
such  meetings  by  the  affirmative  vote  of  stockholders 
owning  at  least  two-thirds  in  amount  of  all  of  the  issued 
and  outstanding  shares  of  stock  of  their  respective  banks, 
it  shall  thereupon  become  binding  upon  such  banks. 

dlTcumentstob^S  (^)  After  such  merger  agreement  shall  have  become 
"^"^o^f^counry,  after  binding  upon  the  respective  banks  who  are  parties  thereto, 
Te'.fome^SS  ^^  herein  provided,  one  of  the  duplicates  thereof  with  a 
copy  of  the  superintendent  of  banks'  written  approval 
and  a  sworn  copy  of  the  proceedings  of  the  meetings  at 
which  such  agreement  was  finally  approved,  made  by  the 
secretaries  thereof  respectively,  shall  be  filed  in  the  office 
of  the  superintendent  of  banks,  and  the  other  duplicate  of 
such  agreement  shall  be  filed  in  the  office  of  the  clerk  of 
the  county  in  which  is  located  the  principal  place  of  busi- 
ness of  the  bank  into  which  the  other  corporation  or  cor- 
porations are  to  be  merged. 

eff^cUvrupon^S  (4)  Upon  filing  the  duplicates  of  such  merger  agree- 
of  papers  as  specified.  ^^^^^  together  with  copies  of  its  approval  by  the  superin- 
tendent of  banks,  the  merger  agreement  shall  take  effect 
according  to  all  of  its  terms  and  the  merger  shall  there- 
upon take  place  as  provided  in  the  agreement  without  fur- 
ther or  other  act,  transfer  or  substitution.     Upon  the  tak- 

Merged  banks  then  j^g  effect  of  the  merger  agreement,  the  merged  corpora- 
te surrender  licenses.  =>  ^  >  =3  i- 

tion  or  corporations  shall  surrender  their  licenses  to  do  a 
banking  business  for  cancellation  by  the  superintendent 
of  banks. 

Efifect^of  merger  upon        (5)    Upon  the  merger  of  any  corporation  or  corpora- 
and  relations  of  tions  into  another,  as  provided  in  this  section : 

merged  bank. 

(a)    Its  corporate  existence  shall  be  merged  into  that 
of  such  other  corporation,  and  all  and  singular  its  rights, 

[58] 


GENERAL  PROVISIONS  §3lb 


privileges  and  franchises,  and  its  right,   title  and  interest  upon^right^^^^^ 
in    and    to    all    property,    real,    personal    or    mixed,    and  of  merged  ^^^" 
chooses  in  action,   and  every  right,   privilege,   interest  or  BANKS-continued. 
asset  of  conceivable  value  or  benefit  then  existing  or  which 
would  thereafter  inure  to  it  under  an  unmerged  existence 
shall  be  deemed  fully  and  finally,  and  without  any  right 
of    reversion,    interruption,    impairment    or   limitation    of 
title,  right  or  privilege,   transferred  to  and  vested  in  the 
corporation  into  which  it  shall  have  been  merged,  with- 
out further  act  or  deed,  and  such  last  mentioned  corpora- 
tion   shall    have,    hold,    possess,    enjoy   and    enforce    the 
same  in  its  own  right,  as  fully  as  the  same  was  possessed, 
enjoyed  and  held  by  the  merged  corporation  from  which 
it  was,   by  operation   of   the   provisions   of   this   section, 
transferred. 

(b)  Its  rights,  obligations,  properties,  assets,  invest- 
ments, deposits,  demands,  contracts,  agreements,  court 
and  private  trusts,  as  defined  in  the  bank  act,  and  other 
relations  to  any  person,  creditor,  depositor,  trustee,  prin- 
cipal or  beneficiary  of  any  court  or  private  trust,  shall  re- 
main unimpaired  and  without  change  or  alteration  in  any 
respect,  and  the  corporation  into  which  it  shall  have  been 
merged  shall,  by  such  merger,  ipso  facto  and  by  opera- 
tion of  law,  without  further  transfer,  substitution,  act  or 
deed,  and  in  all  courts  and  places  be  deemed  and  held  to 
have,  and  shall  become  subrogated  and  shall  succeed,  to 
all  such  rights,  obligations,  properties,  assets,  investments, 
deposits,  demands,  contracts,  agreements,  court  and  pri- 
vate trusts,  and  other  relations  to  any  person,  creditor, 
depositor,  trustee,  principal  or  beneficiary  of  any  court  or 
private  trust,  obligations  and  liabilities,  of  every  kind  or 
nature,  and  shall  execute  and  perform  all  such  court  and 
private  trusts  in  the  same  manner  as  though  it  had  itself 
originally  assumed  the  relation  or  trust  or  incurred  the  ob- 
ligation or  liability;  the  corporation  into  which  it  shall 
have  been  merged  shall  succeed  to  and  be  entitled  to  take 
and  execute  and  receive  the  appointment  to  all  executor- 

[59] 


§31b BLYTH.  WITTER  &  CO. 

EFFECT^OF  MERGER  gj^jpg  trusteeships,  guardianships,  and  other  fiduciary 
RELATIONS^  ETC^  capacities  in  which  the  merged  corporation  may  be  then 
BANKS— Continued,  qj.  thereafter  named  in  wills  theretofore  or  thereafter  pro- 
bated, or  in  any  other  instruments;  and  the  liabilities  and 
obligations  of  such  merged  corporation  to  the  depositors, 
beneficiaries,  principals  and  other  creditors  existing  for 
any  cause  whatever  shall  not  be  impaired  by  such  merger; 
nor  shall  any  obligation  or  liability  of  any  stockholder  in 
any  corporation  which  is  a  party  to  such  merger  be  af- 
fected by  any  such  merger,  but  such  obligations  and  liabil- 
ities shall  continue  as  fully  and  to  the  same  extent  as 
existed  before  such  merger. 

(c)  Any  action  pending  or  other  judicial  proceedings 
to  which  any  corporation  that  shall  be  so  merged  is  a 
party,  shall  not  be  deemed  to  have  abated  or  to  have  dis- 
continued by  reason  of  the  merger,  but  may  be  prose- 
cuted to  final  judgment,  order  or  other  decree  in  the  name 
of  the  merged  corporation,  in  the  same  manner  as  if  the 
merger  had  not  been  made,  or  such  merging  corporation 
may  be  substituted  as  a  party  to  such  action  or  proceed- 
ing, and  any  judgment,  order  or  decree  may  be  rendered 
for  or  against  it  that  might  have  been  rendered  for  or 
against  such  merged  corporation,  if  the  merger  had  not 
occurred. 

in^'merled^blnks'may        ^^^    ^^^  Corporation  into  which  the  other  corporation 

be  required  in  ex-  qj.  corporations  shall  have  been  merged,  as  herein  pro- 
change  for  certificates  ^  o       '  r- 

of  stock  of  merging  vided,  may  require  the  return  of  the  original  certificate  or 
certificates  held  by  each  stockholder  in  such  other  cor- 
poration or  corporations,  and  may  issue  in  lieu  thereof 
new  certificates  for  such  number  of  its  own  shares  as  such 
stockholder  may  be  entitled  to  receive  under  the  merger 
agreement. 

(7)    In  the  event  that,  either 

Effect  of  faUure  of        (a)    Any  stockholder  of  any  such  merged  corporation 

stockholder  °^     t      -i^    r    .■>  <•  -i-  •  i  r  i 

merged  bank  to  return  shall  tail  or  refuse.  Within  ninety  days  arter  such  merger 
shall  take  effect,  to  return  the  original  certificate  or  certi- 

[60] 


GENERAL  PROVISIONS  §3  lb 


ficates  held  by  such  stockholder  in  such  merging  corpora-  ure^of  stx)CK^^ 
tion  or  corporations  and  to  accept  in  lieu  thereof  a  new  bank^to°return^° 
certificate  or  certificates  for  such  number  of  the  shares  of  co^i^u^d^^^^^ 
the  merging  corporation  as  such  stockholder  may  be  en- 
titled to  receive  under  the  merger  agreement;  or, 

(b)  Any  stockholder  or  shareholder  shall  vote  against 
or  not  in  favor  of  such  agreement  of  merger,  at  the  meet- 
ing where  such  merger  is  approved,  or  shall  dissent  in 
w^riting  and  file  such  written  dissent  with  the  secretary  of 
the  merged  corporation  within  thirty  days  after  such  Sr^igLnsV"'" 
merger  agreement  shall  have  been  ratified  in  writing  by  S^I^res'Ied"'^ 
the  holders  of  record  of  not  less  than  two-thirds  of  the 
issued  and  outstanding  stock  of  such  corporation  or  cor- 
porations, as  hereinbefore  provided,  and  shall,  within 
thirty  days  after  such  stockholders'  meeting  or  after  the 
date  of  such  stockholders'  ratification,  as  the  case  may  be, 
make  written  demand  for  payment  for  his  shares  of  stock; 

In  either  of  the  events  hereinabove  mentioned,  the 
merging  corporation  shall  buy,  and  such  stockholder  shall 
sell  to  it,  all  such  stock  held  by  such  stockholder,  and,  if 
such  stockholder  be  a  borrower  from  said  corporation, 
said  merging  corporation  shall  demand  liquidation  of  his  ^^°Zlrnob!tJc^hMer 
indebtedness  and  the  cancellation  of  his  shares.      If  such  ^n<i  ^^^  directors  of 

merging  corporation 

Stockholder  and  the  board  of  directors  of  such  merging  cannot  agree  upon 

amount  payable  for 

corporation  cannot  agree  upon  the  amount  to  be  paid  for  stock. 
such  shares  of  stock  or  the  amount  of  said  indebtedness, 
if  any,  either  said  merging  corporation  or  such  stock- 
holder, after  said  merger  takes  effect,  may,  at  any  time 
within  sixty  days  thereafter,  apply  to  the  superior  court 
in  the  county  wherein  is  situated  the  principal  place  of 
business  of  the  corporation  into  which  the  other  or  others 
are  merged,  for  the  appointment  of  three  disinterested 
persons  to  appraise  the  value  of  shares  of  stock  held  by 
such  dissenting  stockholder.  The  court  shall  thereupon, 
after  ten  days'  notice  to  said  merging  corporation  and  to 
such  stockholder,  appoint  such  appraisers,  and  designate 
the  time  and  place  of  their  meeting,  with  such  directions 

[61] 


§  31b-32 BLYTH.  WITTER  &   CO. 

in  regard  to  their  proceedings  as  it  shall  deem  proper, 
and  shall  also  direct  the  time  and  manner  in  which  pay- 
ment shall  be  made  for  the  value  of  the  shares  of  stock  of 
such  stockholder  and  the  cancellation  of  his  shares  of 
stock.  The  court  may  fill  any  vacancies  in  such  board  of 
appraisers.  The  appraisers  shall  meet  at  the  time  and 
place  designated,  and  after  being  duly  sworn  honestly 
and  faithfully  to  discharge  their  duties,  they  shall  make 
and  certify  a  written  estimate  of  the  value  of  such  shares 
of  stock,  and  the  amount  of  such  indebtedness,  if  any, 
and  shall  deliver  one  copy  to  the  merging  corporation 
and  the  other  to  such  stockholder.  The  charges  and  ex- 
penses of  the  appraisers  shall  be  paid  by  such  corporation. 

''rsfchi'ckhoider       When  the  corporation  shall  have  paid  the  appraised 
and  effect  of  same  value  of  such  stock,  or  if  such  Stockholder  be  a  borrower 

upon  nis  corporate 

rights,  as  aforesaid,  when  he  shall  have  paid  the  amount  of  his 
indebtedness  as  fixed  by  such  appraisal,  such  stock  shall 
be  cancelled  and  such  stockholder  shall  cease  to  be  a 
member  of  said  corporation  or  to  have  any  interest  in 
such  stock  or  any  corporate  property,  and  such  stock  may 

Disposition  of  can-  i  ii  ii-  iri.i  .•  r  •. 

celled  stock,  by  be  sold  and  disposed  or  by  the  corporation  ror  its  own 
benefit;  and  if  such  stockholder  or  shareholder  be  a  bor- 
rower as  aforesaid,  proper  instruments  of  acquittance  shall 
be  duly  executed  and  delivered  to  him  by  the  corporation 
and  thereupon  he  shall  be  discharged  from  all  further  lia- 
bility to  the  corporation. 

[Publishers'  note,  re  Section  31h,   1921: 

This  section  covers  the  merger  of  two  banks,  whether  departmental  or  not. 
There  are  already  in  the  Bank  Act  provisions  covering  the  purchase  of  one  bank 
by  another  and  the  consolidation  of  two  or  more  banks.  This  section  is  intended 
to  supplement  provisions  already  in  the  Act  (covering  the  purchase  of  one  bank 
by  another  and  the  consolidation  of  two  or  more  banks),  and  sets  out  in  detail 
the  steps  to  be  followed  in  the  merger  proceedings,  and  the  effect  thereof.  The 
purpose  of  this  section  is  to  permit  one  or  more  banks  to  merge  into  another 
bank  and  enable  the  merging  bank — that  is,  the  bank  receiving  the  merged  bank 
or  banks — to  take  over  all  assets,  liabilities,  rights  and  relations  of  every  sort, 
of  the  merged  bank  or  banks,  including  relations  of  trust,  by  operation  of  law, 
upon  the  completion  of  the  steps  set  forth  in  the    amendment.] 

Bank  not  to  mingle       Section  32.     Any  bank  receiving  trust  funds  in  accord- 
trust  funds  with 

other  assets,  ance  with  the  provisions  of  this  act  relating  to  trust  com- 
panies must  not  mingle  such  trust  funds  with  the  other 
assets  of  the  corporation,  except  as  otherwise  provided 

[621 


GENERAL  PROVISIONS  §  32-37 


in  section  twenty-five  of  this  act,  and  such  funds  shall  not 
be  carried  or  counted  as  any  part  of  the  total  reservc^ 
provided  for  in  this  act.  The  officers  of  any  bank  who 
knowingly  violate  or  consent  to  the  violation  of  this  pro-  violation  of  pro- 

°  •'  vision,  felony. 

vision  shall  be  guilty  of  a  felony. 
(Section    33.      Repealed   1913.) 
Section  34.     No  bank  shall  purchase  or  invest  its  capi-  No  bank  to  purchase, 

invest  or  lend  upon 

tal  or  surplus  or  money  of  its  depositors,  or  any  part  of  its  capital  stock, 

.      ,  ,  I  .        unless  to  prevent 

either,  in  shares  of  its  own  capital  stock;  nor  loan  its  loss  on  debt. 
capital  or  surplus  or  money  of  its  depositors,  or  any  part 
of  either,  on  shares  of  its  own  capital  stock,  unless  such 
purchase  or  loan  shall  be  necessary  to  prevent  loss  to 
such  bank  on  debts  previously  contracted  in  good  faith. 
Every  person  or  corporation  violating  any  provision  of  Penalty. 
this  section  shall  forfeit  to  the  people  of  the  state  twice 
the  nominal  amount  of  such  stock. 

Section  35.     No  bank  shall  purchase  any  contract  aris-  Limitations  upon 

purchase  of  realty 

ing  from  the  sale  of  real  estate  or  any  note  or  bond  in  note  or  bond  by  in- 

°  terested  officers,  etc. 

which  contract,  or  note,  or  bond  any  director,  officer, 
employee,  or  controlling  stockholder  of  such  bank  is 
personally  or  financially  interested,  directly  or  indirectly, 
for  his  own  account,  for  himself,  or  as  the  partner  or 
agent  of  others,  without  the  previous  consent  in  writing 
of  the  superintendent  of  banks. 

Section  36.      No  commercial  bank  receiving  deposits  ^°,'^i™"g'^lp^\°ts 
of  money  shall  purchase  or  agree  to  purchase  any  bond  "s°sug°  j^"  g^^^jfes^s  ^°"^ 
issue  in  excess  of  five  per  centum  of  its  assets,  except  5'v  of  assets,  except. 

*^  governmental  bonds. 

bonds  of  the  United  States,  of  the  State  of  California,  of 
the  counties,  cities  and  counties,  cities  or  school  districts 
of  this  state,  or  bonds  of  any  irrigation  district  such  as  are 
legal  for  investment  by  savings  banks. 

Section  3  7.      No  bank  shall,  except  as  otherwise  pro-  Restriction  on  pur- 

chasing  or  investing 

vided  in  this  act,  purchase  or  invest  its  capital  or  surplus  in  capital  stock  of 
or  money  of  its  depositors,  or  any  part  of  either,  in  the 
capital  stock  of  any  corporation  unless  the  purchase  or 

1631 


any  corporation. 


§37  BLYTH,  WITTER  &  CO. 

acquisition  of  such  capital  stock  shall  be  necessary  to  pre- 
vent loss  to  the  bank  on  an  obligation  owned  or  on  a 
debt  previously  contracted  in  good  faith.      Any  capital 
Capital  stock  so  stock  SO   purchased   or  acquired   shall  be  sold   by  such 

purchased  to  be  sold.   ,,.,..  ,,  ,  .,.  ,  iir 

bank  within  six  months  therearter  ir  it  can  be  sold  tor 
the  amount  of  the  claim  of  such  bank  against  it;  and  all 
capital  stock  thus  purchased  or  acquired  must  be  sold  for 
the  best  price  obtainable  by  said  bank  within  three  years 
after  such  purchase  or  acquisition  unless  the  superintend- 
ent of  banks  shall  extend  the  time  of  its  sale  for  a  period 
not  to  exceed  two  years. 

Bank  after  consent  of       ^j^y  bank,   with  the  previous  written  consent  of  the 

Supt.,  may  acquire  •'  '^ 

Camirn^rtr^ust  com^  Superintendent  of  banks,  may  purchase  or  otherwise  ac- 
^^°^u°same\"oun'ty!  q^i^e  and  hold  the  whole  or  any  part  of  the  capital  stock 
of  not  more  than  one  trust  company  organized  and  exist- 
ing under  the  laws  of  this  state,  and  doing  business  in  the 
same  county  in  which  the  principal  place  of  business  of 

Limitation  on  such 

purchase,  such  bank  is  located;  provided,  however,  that  not  more 
than  an  amount  equal  to  twenty-five  per  centum  of  the 
capital  and  surplus  of  any  such  bank  may  be  at  any  one 
time  invested  in  the  capital  stock  of  such  trust  company 
or  such  other  corporation;  and  provided,  further,  that 
no  such  trust  company  shall  engage  in  or  combine  the 
business  of  a  commercial  bank  or  a  savings  bank  or  a  title 
insurance  company. 
Bank,  with  consent       Any  bank,   with  the  previous  written  consent  of  the 

of  Supt.,  may  pur-  "^  i  i  • 

chase,  etc.,  stock  of  suoerintendent    of    banks,    may    purchase    or    otherwise 

one  safe-deposit  cor-         *^ 

poration  in  same  city,  acquire  and  hold,  the  whole  or  any  part  of  the  capital 
stock  of  not  more  than  one  corporation  authorized  and 
empowered  to  conduct  a  safe  deposit  business,  which 
such  corporation  is  organized  and  existing  under  the  laws 
of  this  state  and  doing  business  in  the  same  city  in  which 
the  principal  place  of  business  of  such  bank  is  located; 
Limitation  on  such  provided,  howevcr,  that  not  more  than  an  amount  equal 
to  ten  per  centum  of  the  capital  and  surplus  of  any  such 

[64] 


investment. 


GENERAL  PROVISIONS §  37-39 

bank  may  be  at  any  one  time  invested  in  the  capital  stock 
of  such  safe  deposit  corporation. 

[Publishers'   note,   re   Section  37,   as   amended   1921: 

This  amendment  provides  that  a  bank  may  purchase  the  capital  stock  of  not 
more  than  one  California  trust  company  doing  business  in  the  same  county,  instead 
of  in  the  same  city,  as  previously  provided.] 

Section  38.  A  director,  officer,  agent  or  employee  of 
any  bank  who, 

First — Knowingly  receives  or  possesses  himself  of  any  Director,  agent,  etc., 

.  .  ,         of  bank  making  or 

of  its  property  otherwise  than  in  payment  for  a  just  de-  concurring  in  false 

_  .  entry  or  report,  or  in 

mand,  and  with  intent  to  defraud,  omits  to  make  or  to  omitting  to  make 

,  .    -,  ,  ,  -   full  and  true  entries, 

cause  or  direct  to  be  made  a  full  and  true  entry  thereoi  etc.,  guilty  of  felony. 
in  its  books  and  accounts;  or. 

Second — Concurs  in  omitting  to  make  any  material 
entry  thereof;  or. 

Third — Knowingly  concurs  in  making  or  publishing 
any  written  report,  exhibit  or  statement  of  its  affairs  or 
pecuniary  condition  containing  any  material  statement 
which  is  false;  or. 

Fourth — Having  the  custody  or  control  of  its  books, 
wilfully  refuses  or  neglects  to  make  any  proper  entry  in 
the  books  of  such  corporation  as  required  by  law,  or  to 
exhibit  or  allow  the  same  to  be  inspected  and  extracts 
to  be  taken  therefrom  by  the  superintendent  of  banks, 
his  chief  deputy  or  any  of  his  examiners,  shall  be  guilty 
of  a  felony. 

Section  39.     Any  officer,  director,  agent,  teller,  clerk  Bank  director  or  em- 

•^  ployee  overdrawing 

or  employee  of  any  bank  who  either,  accounts  or  receiving 

commissions  on  loan 


First — Knowingly  overdraws  his  account  with  such 
bank,  and  thereby  obtains  the  money,  notes  or  funds  of 
any  such  bank;  or 

Second — Asks  or  receives  or  consents  or  agrees  to 
receive  any  commission,  emolument,  gratuity  or  reward, 
or  any  money,  property  or  thing  of  value,  for  his  own 
personal  benefit,   or  of  personal  advantage,   for  procur- 

[65] 


gruilty  of  felony. 


§  39-43  BLYTH,  WITTER  &  CO. 


ing  or  endeavoring  to  procure  for  any  person,  firm  or 
corporation  any  loan  from,  or  the  purchase  or  discount 
of  any  paper,  note,  draft,  check  or  bill  of  exchange,  by 
such  bank,  or  for  permitting  any  person,  firm  or  cor- 
poration to  overdraw  any  account  with  such  bank,  is 
guilty  of  a  felony. 

Contract  of  bank  to       Section  40.     No  bank  mentioned  in  this  act  shall  make 

■waive  stocknolder  s 

liability,  void,  ^ny  Contract  with  any  of  its  depositors  whereby  the 
stockholders'  liability  provided  for  by  the  constitution  of 
this  state  is  in  any  manner  waived,  and  if  any  such  con- 
tract shall  be  so  made,  such  contract  shall  be  void. 

^re^c^tor,°emp!oyet       Section  41.      No  officer,  director,  agent,  or  other  em- 

belnter^estTd^rpu"  P^oy^e  of  any  bank  shall  direcdy  or  indirecdy,    for  his 

chase  of  bank's  ob-  own  personal  benefit,   purchase,   or  be  interested  in  the 

ligations  or  assets  ^  »     i-  > 

under  face  value,  purchase  of  any  of  such  bank's  obligations  or  assets  for 

Exception,  "^  *=* 

a  less  sum  than  shall  appear  upon  the  face  of  any  such 
obligations  or  assets  to  be  the  value  thereof  except  with 
the  previous  consent  of  all  the  directors  of  said  bank, 
such  consent  to  be  evidenced  by  a  resolution  adopted  by 
said  directors.  A  certified  copy  of  said  resolution  shall 
immediately  be  transmitted  to  the  superintendent  of 
Penalty,  banks.  Evcry  person  violating  any  provision  of  this 
section,  shall  for  each  offense  forfeit  to  the  people  of  the 
state,  twice  the  face  value  of  any  such  obligations  or 
assets  so  purchased. 

Section  42.  No  officer,  director,  agent  or  other  em- 
ployee of  any  bank,  shall  directly  or  indirectly,  for  his 
own  personal  benefit,  purchase,  or  be  interested  in  the 
Penalty,  purchase  of  any  of  the  assets  of  said  bank  for  a  less  sum 
than  the  current  market  value  thereof.  Every  person 
violating  any  provision  of  this  section,  shall  for  each 
offense,  forfeit  to  the  people  of  the  state,  twice  the  nomi- 
nal amount  of  any  such  assets  so  purchased. 

No  bank  to  deposit        Section  43.      No  bank  shall  deposit  any  of  its  funds 

funds  m  other  bank  ^  •' 

except  Federal  Ra-  in  any  Other  bank,  except  a  federal  reserve  bank,  unless 

serve  bank,  unless  ^  '  tr 

as  specified,  such  Other  bank  has  been  nominated  as  a  depositary  for 

166] 


GENERAL  PROVISIONS §  43-47 

its  funds  by  the  vote  of  a  majority  of  the  directors  or 
trustees  of  the  bank  making  the  deposit,  and  such  other 
bank  has  been  designated  by  the  superintendent  of  banks 
as  such  depositary. 

The  superintendent  of  banks  may  in  his  discretion  re- 
voke such  a  designation. 

Section    44.      No   bank    shall   hereafter   make   a   loan  Limitation  and  re- 

dii  If  111T1  i>  1      strictions  upon  loan 

by  the  stock,  or  another  bank,  ir  by  making  such  secured  by  stock  of 

loan  the  total  stock  of  such  other  bank  held  by  such  loan- 
ing bank  as  collateral  will  exceed  in  the  aggregate  twenty- 
five  per  centum  of  the  capital  stock  of  such  other  bank; 
provided,  that  no  loan  upon  the  capital  stock  of  any  bank 
shall  be  made  unless  such  bank  has  been  in  existence  at 
least  two  years  and  has  earned  and  paid  a  dividend  upon 
its  capital  stock;  and  provided,  further,  that  no  bank 
may  loan  more  than  five  per  centum  of  its  assets  upon  the 
capital  stock  of  any  corporation  whatsoever  as  collateral 
security. 

Section   45.     Interest  unpaid,  although  due  or  accrued.  Unpaid  interest  not 

11  .  11111  1  •       1      1      1     .        deemed  profits  pre- 

on  debts  owmg  to  any  bank,   shall  not  be  included   in  vious  to  dividend. 
calculation  of  its  profits  previous  to  a  dividend;  nor  shall 
any  bank,  except  with  the  previous  written  consent  of  the 
superintendent  of  banks,  enter  or  at  any  time  carry  on  its  No  valuation  of  as- 
books  any  of  its  assets  at  a  valuation  exceeding  its  actual  without  consent 
cost  to  such  bank. 

Section  46.     No  commercial  bank  shall  invest  or  loan  no  bank  to  loan  or 

.M  n  .r«.  .•  t_j    invest   more    than   6% 

more  than  iive  per  centum  or  its  assets  in  any  one  bond  of  assets  in  any  one 
issue,  except  bonds  of  the  United  States,  of  the  State  of  governmental  bonds, 
California,  of  the  counties,  cities  and  counties,  cities  or  ^^  ^'^^^^ 
school  districts  of  this  state,  or  bonds  of  any  irrigation 
district  such  as  are  legal  for  investment  by  savings  banks. 

No  commercial  bank. 

Section  47.     No  commercial  bank  shall,  except  for  the  sale  of  property 

fi.,|..i  ||.  Ill         owned  to  make  loan 

facilitating  the  sale  or  property  owned  by  the  on  real  estate,  un- 

bi  1  1  ^1  -tflii  1  less  first  lien  and 

ank,  make  any  loan  on  the  security  or  real  estate,  unless  for  specified  period 

...  r       .    1-  1    •         -.1  and  per  centum  of 

It  is  a  hrst  lien  and  is  either  value. 

[67] 


§47-48 BLYTH.  WITTER  &  CO. 

( 1 )  Made  for  a  period  of  time  not  exceeding  six 
months  and  upon  security  worth  at  least  fifteen  per 
centum  more  than  the  amount  loaned;  or 

(2)  Made  for  a  period  of  time  exceeding  six  months 
and  not  exceeding  ten  years  and  does  not  exceed  sixty 
per  centum  of  the  market  value  of  the  real  estate  taken  as 
security. 

Subsequent  mort-       No  Commercial  bank  shall  loan  in  the  aggregate  more 

eases  and  deeds  of     i  i   .  ^ 

trust,  than  thirty-five  per  centum  of  its  assets  on  real  estate 
loans  of  the  character  specified  in  subdivision  two  of  this 
section.  These  provisions,  however,  shall  not  prevent 
any  bank  from  taking  another  and  immediately  subse- 
quent mortgage  or  deed  of  trust  thereon  when  it  already 
holds  a  first  mortgage  or  deed  of  trust  on  such  real 
estate,  nor  from  accepting  a  second  lien  on  real  estate 
to  secure  the  repayment  of  a  debt  previously  contracted 
in  good  faith;  nor  shall  it  prevent  subsequent  liens  of  any 
kind  from  being  taken  to  secure  the  pa3mnent  of  a  debt 
previously  contracted  in  good  faith  when,  in  the  judg- 
ment of  the  directors  of  such  bank,  such  subsequent  liens 
are  necessary  further  to  secure  the  pajnnent  of  any  debts 
and  save  such  bank  from  loss. 

National  bank  other        Section  48.      Any  national  bank,   in  this  state,   other 

than  Federal  Reserve 

bank  receiving  State  than  a  federal  reserve  bank,  receiving  the  deposits  of  any 

bank  deposits,  must, 

at  request  of  supt.,  bank  Organized  and  conducting  business  under  this  act, 

submit  to  examina-  *="  ° 

tion.  must,  at  the  request  of  the  superintendent  of  banks,  sub- 
mit to  an  examination  by  him,  or  his  duly  appointed  ex- 
aminers, should  the  superintendent  of  banks  in  his  dis- 
cretion deem  it  necessary  or  desirable  that  such  examina- 
tion be  made;  and  the  expense  of  such  examination  shall 
EflFect of  refuiai.  be  paid  by  such  depositary  bank;  and  if  any  such  bank 
shall  refuse  to  permit  such  examination  to  be  made  by, 
or  under  the  direction  of,  the  superintendent  of  banks, 
then  the  superintendent  of  banks  shall  notify  in  writing 
every  bank  depositing  its  funds  with  such  bank,  to  with- 

[68] 


GENERAL  PROVISIONS §  48-48a 

draw  its  deposits  therefrom,  and  all  such  banks  shall 
comply  with  such  order. 

Section  48a.    Any  national  banking  association,  whose  Nati.  Banking  Ass'n 

with  principal  place 

principal    place    or   business    is   in    this    state,    is    hereby  of  business  in  state, 

.       r  •  -   .         •  11  authorized  to  act  in 

authorized  to  act  in  fiduciary  capacities  in  all  respects  as  fiduciary  capacitie», 

•  1      1  1  1  r  1   T-w  1  o  o      "^^  provided  by  Fed. 

provided  by  the  acts  or  congress,  approved  December  Li,  Reserve  Act. 
1913,  and  amendments  thereof,  commonly  known  as  the 
federal  reserve  act,  and  all  acts  herein  provided  to  be 
performed  by  the  state  treasurer,  the  superintendent  of 
banks  or  other  public  officials  for  or  in  respect  of  trust 
companies,  shall  be  performed  for  such  national  bank- 
ing   association    equally    with    trust    companies.       Every  Every  such  Ass'n, 

*»  ^  •'  ^  authorized  in  Sec, 

such  national  banking  association  which  shall  be  author-  ^^y  act  in  fiduciary 

'^  capacities. 

ized  to  exercise  said  fiduciary  powers,  and  which  has 
qualified  by  making  the  deposit  of  securities  required  by 
the  law  of  this  state,  may  act,  or  may  be  appointed  by 
any  court  to  act  in  any  such  capacity  in  like  manner  as  an 
individual.     Every  such  association  shall  be  permitted  to  Such  association  may 

,  ,,    .       .  I  I  use  "Trust"  in 

use  the  word     trust     m  its  corporate  name  and  to  adver-  corporate  name. 
tise  its  authority  to  act  in  fiduciary  capacities,  anything  to 
the  contrary  in  this  act  notwithstanding. 

The  superintendent  of  banks  shall  inspect  and  examine  Supt.  shall  examine 
the  books,  records  and  assets  of  the  trust  department  of  of  trust  dept.  of 

each  such  Ass  n. 

each  national  banking  association  which  conducts  a  trust 
department  in  this  state  to  the  same  extent  that  the  said 
superintendent  of  banks  exercises  visitorial  supervision 
over  trust  companies  organized  and  existing  under  the 
laws  of  this  state. 

The  charge  by  the  state  banking  department  for  all 
services  rendered  to  any  national  banking  association  by 
the  superintendent  of  banks,  in  accordance  with  the  pro- 
visions of  this  section,  shall  be  paid  by  the  national  bank- 
ing association  requiring  such  services.  Such  charge  for  S^S  re°n^dered  i°y' 
services  shall  be  determined  by  the  superintendent  of  ^tate  Banking  Dept. 
banks,    and   shall   be   no   higher   than   the   charge    for   a 

[69] 


§  48a-50  BLYTH,  WITTER  &  CO. 

similar  service  to   trust  companies  organized   under  the 
laws  of  this  state. 

The  cost  of  all  regular  and  ordinary  service  shall  be 
calculated  upon  the  amount  of  the  securities  deposited  by 
each  such  national  bank  with  the  treasurer  of  the  state 
for  the  due  execution  and  faithful  performance  of  its 
court  and  private  trusts  at  the  same  ratio  as  is  applied  to 
the  capital  and  surplus  of  trust  companies  organized 
under  the  laws  of  this  state  in  determining  the  cost  to 
them  for  such  services. 

The  cost  of  all  special  and  extraordinary  services  shall 
be  the  same  as  that  provided  for  in  section  one  hundred 
twenty-four  of  this  act. 

[Publishers'   note,   re  Section  48a,   as  amended  1921: 

The  amendment  is  at  the  end  of  the  first  paragraph  of  the  old  section,  con- 
sisting of  a  provision  added  which  permits  a  national  banking  association  resident 
in  this  State  and  which  has  assumed  trust  functions,  to  use  the  word  "trust" 
in  its  corporate  name.] 

Holding  out  as  sav-        Section   49.      It  shall  not  be  lawful  for  any  commer- 

ings  bank  by  com-  "^ 

merciai  bank,  etc.,  ^ial   bank,    individual,    trust  company,   association,    firm, 

unlawful. 

stock  company,  copartnership  or  corporation,  to  adver- 
tise or  put  forth  a  sign  as  a  savings  bank,  or  either 
directly  or  indirectly  or  in  any  way  to  solicit  or  receive 
deposits  or  to  transact  business  in  the  way  or  manner  of 
a  savings  bank,  or  to  advertise  that  he  or  it  is  receiving 
or  accepting  savings,  or  in  any  way  which  might  lead  the 
public  to  believe  that  such  deposits  are  received  or  in- 
vested under  the  same  conditions  or  in  the  same  manner 
as  deposits  in  savings  banks,  except  in  the  case  of  sav- 
ings banks  or  banks  having  savings  departments,  subject 
Penalty,  to  the  provisions  of  this  act.  Any  commercial  bank,  in- 
dividual, trust  company,  association,  firm,  stock  com- 
pany, copartnership  or  corporation,  violating  any  pro- 
vision of  this  section  shall  forfeit  to  this  state  one  hundred 
dollars  a  day  for  every  day  during  which  such  violation 
continues. 

Every  bank  or  branch       Section    50.      Every  bank  shall  post  in  a  conspicuous 

to  post  last  certin-  j  ir  •. 

cate  from  Supt.  place  in  its  banking  room  or  branch  office  the  last  cer- 

[70] 


GENERAL  PROVISIONS  §  50-52 


tificate  obtained  from  the  superintendent  of  banks  under 
the  provisions  of  either  section  nine  or  one  hundred 
twenty-seven  of  this  act. 

Section    5  1 .     Any  court  having  appointed  and  having  Court  may.  under 

.      1-     .•  £  I       .     .  ,.  (onditions  Bpc- ified, 

jurisdiction  or  any  executor,  administrator,  guardian,  as-  authorize  executor. 

1  .  ,  ,.  administrator,  ruard- 

signee,  receiver,  depositary  or  trustee,  upon  the  apphca-  ian,  receiver, 

.•  £1  .  !••..  1-  •  trustee,  etc.,  to  de- 

tion  or  such  executor,  administrator,  guardian,  assignee,  posit  money  in  state 
receiver,  depositary  or  trustee,  or  upon  the  appHcation 
of  any  person  having  an  interest  in  the  estate  adminis- 
tered upon  by  such  officer  or  trustee,  after  notice  to  other 
parties  in  interest  as  the  court  may  direct,  and  after  a 
hearing  upon  such  application,  may  authorize  such  officer 
or  trustee  to  deposit  any  money  then  in  his  hands  as 
such  officer  or  trustee  or  which  may  thereafter  come  into 
his  hands,  and  until  the  further  order  of  the  court,  in  any 
bank  organized  under  the  laws  of  the  State  of  California; 
and  upon  such  deposit  being  made,  the  officer  or  trustee 
so  depositing  the  same  shall  thereafter  and  while  such 
moneys  remain  on  deposit  in  such  bank,  be  relieved  and 
discharged  from  all  liability  and  responsibility  therefor, 
and  the  bond  required  of  such  officer  or  trustee  given 
upon  his  appointment  shall  be  thereupon  by  said  court 
reduced  to  such  an  amount  as  the  court  may  deem  reason- 
able; such  deposit  shall  be  repaid  only  upon  the  orders  Such  deposit  payable 

only  on  court  order. 

of  said  court,  and  shall  be  a  preferred  claim  against  such 
bank  and  be  paid  in  full  before  any  other  depositor  of 
such  bank  shall  have  been  paid. 

Section    52.      Whenever  a  check  drawn  on  any  bank  Certified  check  must 

r  I      1  I         1         ^^  immediately 

is  certified  by  any  officer  or  employee  of  such  bank,  the  charged. 
amount    thereof    shall    be    immediately    charged    against 
the  account  of  the  person,    firm  or  corporation  drawing 
the  same. 

It  shall  be  unlawful  for  any  officer  or  employee  of  any 
bank  to  certify  any  check  drawn  upon  such  bank  unless 
the  person,  firm  or  corporation  drawing  the  check  has 
on  deposit  with  the  bank  at  the  time  such  check  is  certi- 

[71] 


§52-54  BLYTH,  WITTER  &  CO. 

fied,  an  amount  of  money  subject  to  the  payment  of  such 
check,  equal  to  the  amount  specified  in  such  check. 

pSee^v^iatingSe'^:  ^^^  officer  OF  employee  of  any  bank  who  shall  wil- 
guuty  of  felony,  {^^\\y  violate  the  provisions  of  this  section,  or  shall  resort 
to  any  device,  or  receive  any  fictitious  obligations, 
directly  or  indirectly,  in  order  to  evade  the  provisions 
hereof,  or  who  shall  certify  checks  before  the  amount 
thereof  shall  have  been  regularly  entered  to  the  credit  of 
the  drawer,  shall  be  guilty  of  a  felony. 

Par  value  of  capital       Section    53.     The  Capital  stock  of  any  bank  having  a 

stock  $100  and  paid  .      ,  i        i      ii    i  i  r  i  i         i      i     i 

up  value  to  be  on  Capital  stocK  shall  have  a  par  value  or  one  hundred  dol- 
lars per  share,  and  the  paid-up  value  shall  be  endorsed 
upon  the  face  of  each  certificate  issued,  which  paid-up 
value  shall  be  the  same  on  all   certificates  issued.      No 

Proviso  as  to  non-  bank  shall  have  preferred  stock ;  provided,  how^ever,  that 

compliance  prior  to  ,  ,  ,  .      ,  ,  t  i       i  o  i  r      r    m      i 

Jan.  1, 1915.  no  bank  whose  capital  stock,  on  January  I,  \y\D,  railed 
to  comply  w^ith  any  of  the  requirements  of  this  section, 
shall  be  compelled  to  change  its  capital  stock  in  compli- 
ance herewith. 

Real  estate  acquired        Section    54.     All  real  estate  purchased  by  any  bank  at 

by  bank  and  not 

necessary  in  its  busi-  sales  Under  pledges,  mortgages  or  deeds  of  trust  for  its 

ness,  must  be  sold  t,^« 

exchanged,  as  speci-  benefit  for  money  loaned  and  such  as  may  be  conveyed 
to  it  by  borrowers  in  satisfaction  and  discharge  of  loans 
made  thereon  and  all  other  real  estate  owned  or  held  by 
it,  which  is  not  necessary  for  carrying  on  its  business, 
must  be  sold  or  exchanged  for  other  real  estate  by  such 
bank  within  five  years  after  title  thereto  shall  have  vested 
in  it  by  purchase  or  otherwise;  provided,  however,  that 
no  exchange  of  such  real  estate  for  other  real  estate  shall 
be  made  unless  and  until  written  consent  thereto  shall 
first  be  given  by  the  superintendent  of  banks;  and  pro- 
vided, further,  that  any  real  estate  so  taken  in  exchange 
may  be  held  for  such  period  of  time  as  the  superintendent 
Parcels  not  sold  or  of  banks  may  fix  but  not  to  exceed  five  years.     Parcels 

exchanged  within       r  ^  i  ii  i  j'i.L'  -J 

said  time  purchas-  ot  such   real   estate  not  sold   or   exchanged   withm   said 

able  by  any  person;    ..  i  i  i    i  i.'  iL 

procedure  outlined,  time  may  be  purchased  by  any  person  wanting  the  same 

172] 


GENERAL  PROVISIONS §  54 

upon  the  conditions  and  proceedings  following:  The 
intending  purchaser  may  file  a  petition  in  the  superior 
court  in  and  for  the  county  wherein  said  real  estate  or 
any  portion  thereof  is  situated;  upon  the  filing  of  such 
petition  a  citation  shall  be  issued  out  of  said  court  directed 
to  the  bank  owning  such  real  estate  requiring  such  bank 
to  show  cause  on  a  day  certain  which  shall  be  not  earlier 
than  ten  days  after  the  service  of  such  citation,  why  com- 
missioners should  not  be  appointed  by  said  court  for  the 
purpose  of  appraising  the  value  of  the  real  estate  de- 
scribed in  the  petition  and  of  selling  the  same  at  public 
auction  under  the  provisions  of  this  section.  If  there 
shall  be  any  liens  or  encumbrances  of  record  against 
such  real  estate  the  person  or  persons  holding  such  liens 
or  encumbrances  shall  likewise  be  cited  and  the  court 
shall  in  its  final  decree  distribute  the  proceeds  of  such 
sale,  if  a  sale  thereof  shall  be  made,  according  to  the 
equities  of  the  parties.      If  it  shall  appear  at  the  hearing  Court  to  appoint 

"  *^  commissioners  to 

of  such  petition  that  the  real  estate  therein  sought  to  be  ^g^^Yeiut^heid^y 
purchased  is  held  by  such  bank  in  violation  of  the  pro-  tank  in  violation  of 
visions  of  this  section  or  of  the  constitution  of  this  state, 
the  court  shall  appoint  three  commissioners  to  appraise 
the  value  thereof  and  sell  the  same  at  public  auction  at 
the  county  seat  of  the  county  wherein  said  real  estate  or 
any  part  thereof  is  located.  Notice  of  which  said  sale  f;°J;«'^'^"  governing 
shall  be  given  to  the  bank  owning  said  real  estate  and 
to  any  other  persons  interested  therein  as  shown  by  the 
records  of  such  county  at  least  ten  days  before  the  date 
of  such  sale  and  shall  be  published  once  a  week  for  three 
successive  weeks  in  some  newspaper  published  in  the 
county  where  such  real  estate  or  any  part  thereof  may  be 
located,  or  if  no  newspaper  shall  be  published  in  such 
county  then  in  a  newspaper  published  in  some  neighbor- 
ing county.  Such  notice  shall  state  the  time  and  place 
of  such  sale  and  shall  describe  the  real  estate  to  be  sold 
with  common  certainty  and  state  the  value  thereof  as 
fixed  by  the  appraisement  of  such  commissioners  and  state 

[731 


§54-55  BLYTH,  WITTER  &  CO. 


that  no  bid  less  than  such  appraised  value  will  be  re- 
ceived therefor.  No  sale  shall  be  made  for  an  amount 
less  than  the  appraised  value  of  such  real  estate  fixed  by 

If  no  bid  equals  said  commissioners,  and  in  the  event  that  no  bid  is  re- 
appraised value, 
proceedings  not  ceived  at  such  Sale  at  least  equal  to  said  appraised  value 

renewable  within       ,  .  ■,  . 

one  year,  of  Said  real  estate  no  intending  purchaser  can  institute 
the  proceedings  provided  for  in  this  section  within  one 
year  thereafter.  In  case  of  any  sale  made  under  the 
provisions  of  this  section  and  of  the  refusal  of  any  bank 
owning  such  real  estate  or  of  any  lienholder  or  encum- 
brancer to  execute  the  conveyances  or  releases  necessary 
or  proper  to  vest  the  title  of  such  bank,  lienholder  or  en- 
cumbrancer in  the  purchaser  thereof  the  court  shall  have 
power  in  such  proceedings  to  direct  said  commissioners 
to  execute  such  deeds,  conveyances  or  releases  upon  the 
payment  to  them  of  the  purchase  price  therefor.  The 
^Hmi"d  and  born^  f^^s  of  such  Commissioners  and  cost  of  sale  shall  be  fixed 
by  the  court,  upon  making  such  appointment,  but  the 
entire  expense  thereof  shall  not  exceed  one  hundred  dol- 
lars. The  cost  of  any  such  proceedings  shall  be  borne 
by  the  intending  purchaser  if  no  sale  shall  be  made,  but  if 
a  sale  shall  be  made  the  costs  of  such  proceedings  shall  be 
borne  by  the  purchaser  of  the  property  and  the  person 
who  filed  the  petition  and  advanced  the  costs  of  such 
proceedings  shall  be  reimbursed  in  case  he  shall  not  be- 
come such  purchaser.  All  sales  hereunder  shall  be  re- 
turned to  the  court  having  jurisdiction  of  the  matter  in 
the  same  manner  as  in  the  case  of  sales,  by  commissioners, 
^wH?e  doSank  °^  ^^^^  estate  on  foreclosure  of  mortgages.  Nothing  in 
realty  not  affected  this    section    Contained    shall    be    deemed    to    affect    the 

by  Sec. 

power  of  the  superintendent  of  banks  to  require  the 
writing  down  of  the  value  of  real  estate  held  by  any 
bank,  at  any  time,  when  such  writing  down  shall  be 
proper. 

Receiving  deposits,        Section    55.     Receiving  deposits,  issuing  certificates  of 

etc..  not  creation  of     .  •  i         i  i  i     ii  r  i 

debt  within  mean-  deposit,  checks  and  bills  of  exchange,  and  the  like,  in  the 

ing  of  Civil  Code.  .  ,  .  r         i  i 

transaction  or  the  ordinary  business  of  a  bank,  must  not 

[741 


GENERAL  PROVISIONS  §  55-56 


be  construed  to  be  the  creation  of  debt  within  the  mean- 
ing of  the  phrase  "create  debt"  in  section  three  hundred 
nine  of  the  Civil  Code,  nor  of  indebtedness  within  the 
meaning  of  the  phrase  "the  capital  stock  can  not  be 
diminished  to  an  amount  less  than  the  indebtedness  of 
the  corporation"  in  section  three  hundred  fifty-nine  of  the 
Civil  Code,  except  that  no  bank  shall  reduce  its  capital  f/dSi>°of"apitai 
stock  to  an  amount  less  than  is  required  by  this  act  to  be  **°'=''- 
maintained  by  such  bank,  or  less  than  any  indebtedness 
of  such  bank  other  than  such  deposits. 

The  terms  "real  estate,"  or  "real  property,"  or  "per-  "Real  estate," 

,,  1     .  1   .  1      11     1_  V        "real  property, 

sonal   property,      when   used    m    this   act   shall   have   the  "personal  property," 

^       ^         •'  — how  defined. 

meaning  defined  in,  and  shall  be  construed  m  accordance 
with  the  provisions  of  Title  I  of  Part  I  of  division  second 
of  the  Civil  Code. 

Section    56.     Any  bank  is  hereby  authorized  and  em-  fj^J^^^'^^^^^"- 
powered  to  become  a  member  of  a  federal  reserve  bank,  ll^]^^  Reserve 

Nothing  in  this  act  shall  prohibit  any  such  bank  from 
becoming  a  member  of  a   federal  reserve  bank,    in  the 
manner   provided   in   the   federal   reserve   act,    nor   from 
investing  any  part  of  its  capital  or  surplus  or  reserve  fund  J^^^^^^'paH tf  Ta^p^ 
in  the  capital  stock  of  such  federal  reserve  bank,  in  ac-  *3:i,-/J'„^rin°cVpUai 
cordance  with  the  terms  and  provisions  of  such  federal  ^jj°^^^^^°^^  ^f^^"^^, 
reserve  act;  provided,   that  such  investment  shall  in  no  specified. 
case  exceed  the  minimum  amount  required  to  join  or  as- 
sociate itself  with  or  maintain  membership  in  such  federal 
reserve  bank;  provided,   also,   that  such  investment  may 
be    carried    in   either   the   commercial,    savings,    or    trust 
department,    or  may  be  apportioned  to  any  two   or  all 
three  of  such  departments  of  any  departmental  state  bank 
member. 

Any  bank  joining  or  associating  itself  with  such  federal  f^J,l^'^t,Xlie 
reserve  bank  shall  have  and  exercise  all  powers,  not  in  |^-^,,-f:;^:'^  "p°- 
conflict  with  the  laws  of  this  state,   which  are  conferred 
upon  any  member  bank  in  any  such  federal  reserve  bank, 

[75] 


§  56-56a BLYTH,  WITTER  &  CO. 

by  the  provisions  of  the  federal  reserve  act  and  the  regu- 
lations of  the  federal  reserve  board.  Such  member  bank 
and  its  directors,  officers  and  stockholders  shall  continue 
to  be  subject,  however,  to  all  liabilities  and  duties  im- 
posed upon  them  by  the  bank  act  and  by  any  other  law 
of  this  state. 

jtcrto'fede''rai'ex;       "^"^  ^^"^  which  shall  have  become  a  member  of  a 
aminations.  federal   reserve  bank  shall   be   subject  to   the   examina- 
tions required  under  the  terms  of  the  federal  reserve  act, 
and  the  superintendent  of  banks  may,  in  his  discretion, 

Supt.  may  accept  accept  such  examination  in  lieu  of  the  examination  re- 
such  examination  in  -i  lii_  ••  r.i-  iii. 

lieu  of  one  under  quired  Under  the  provisions  or  this  act,  and  he,  his  agents 
fed'erai'ba^^infor"  ^ri<^  employees,  may  furnish  to  the  federal  reserve  board, 
ma  ion,  jj^^  federal  reserve  bank,  or  to  examiners  duly  appointed 
by  the  federal  reserve  board  or  the  federal  reserve  bank, 
copies  of  all  examinations  made,  and  may  disclose  to 
such  federal  reserve  board,  federal  reserve  bank,  or  ex- 
aminer, any  information  with  reference  to  the  condition 
of  affairs  of  state  bank  members. 

^°^  ''ve^t  int^Natt        Section  56a.     Nothing  in  this  act  shall  prevent  or  pro- 
undw  f'ede'^ai  or  ^^^^^  ^^^  ^^^^  ^^°^  Converting  into  a  national  banking 
state  law.  association  under  the  provisions  of  section  five  thousand 
one  hundred  fifty-four  of  the  United  States  revised  stat- 
utes,  or  section  eight  of  the  federal  reserve  act,   or  any 
oM'cen"rtX\"nch  °*^^^  federal  or  state  law;  provided,  however,  that  in  the 
offices,  event  of  the  application  for  conversion  of  a  state  bank 
into  a  national  banking  association  the  superintendent  of 
banks  may  in  his  discretion  revoke  any  or  all  licenses  for 
branch  offices  granted  within  two  years  immediately  pre- 
ceding said  application  for  conversion  of  any  state  bank 
into  a  national  banking  association. 

Condition  for  con-       No  savings  bank  and  no  departmental  bank  having  a 

version  by  State  ,  ^  ° 

blnk  Sr  in"^  °' ^^^^'^^^    department,    organized    and    existing   under    the 
ings  department,  laws  of  the  State  of  California,  shall  convert  into  a  na- 
tional banking  association  except  upon  the  following  con- 
ditions: 

[76] 


GENERAL  PROVISIONS  §  56c 


1,  Coincident  with  its  application  to  the  comptroller 
of  the  currency,  any  such  savings  or  departmental  bank 
shall  file  with  the  superintendent  of  banks  formal  notice 
of  intention  to  convert  into  a  national  banking  associa- 
tion. 

2.  Prior  to  conversion,  any  such  savings  or  depart- 
mental bank  shall  place  in  the  hands  of  the  superintend- 
ent of  banks, 

(a)  A  constructive  notice  for  newspaper  advertise- 
ment, directed  to  its  savings  depositors,  of  the  fact  of 
conversion ; 

(b)  Actual  notice  addressed  to  each  and  every  sav- 
ings depositor,  at  his  or  her  last  known  address,  enclosed 
in  stamped  and  addressed  envelopes  ready  for  mailing, 
this  notice  to  be  as  follows: 

"You  are  hereby  notified  that  the  undersigned,  for- 
merly the ,  now  the ,  has  converted 

from  a  banking  corporation  existing  under  the  laws  of 
California  into  a  national  banking  association;  and  has 
therefore  ceased  to  be  under  the  jurisdiction  and  direc- 
tion of  the  California  state  banking  department  and  the  ^^°^  T  m"' with 
bank  act  of  California,  and  is  now  under  the  jurisdiction  ^f"?^^  TuthorfzaUon 
and  control  of  the  federal  reserve  act  and  the  national  |^°^„\","^°'^"  ^'"'^ 
act."     No  other  matter  may  be  enclosed  with  this  notice 
unless  by  permission  of  the  superintendent  of  banks. 

3.  Upon  conversion  said  bank  shall  file  with  the  sup- 
erintendent of  banks  a  copy  of  its  authorization  as  a 
national  banking  association,  certified  by  the  comptroller 
of  the  currency;  and  shall  surrender  to  the  superintend- 
ent of  banks  its  license  as  a  state  banking  corporation. 

4.  Immediately    following    the   conversion    of   a   state  immediately  foi- 

•'  lowing  convsrsion, 

bank,   the  superintendent  of  banks  shall   cause  the  pub-  supt.  shall  publish 

'  ^  .    .  /     \  f   °°tice  of  fact  of 

lication    of   the   notice    provided    in    subdivision    (a)    or  conversion,  as 

specified. 

paragraph  two  of  this  section;  same  to  be  at  least  once 
a  week  for  four  successive  weeks  in  a  newspaper  of  gen- 

[771 


§  56a-56b  BLYTH,  WITTER  &  CO. 

eral  circulation,  printed  and  published  in  every  town 
where  said  bank  transacts  its  business  and  if  there  be  no 
such  paper  in  any  such  town  or  towns,  then  in  the  county 
where  such  bank  transacts  its  business,  and  the  superin- 
tendent of  banks  shall  cause  to  be  mailed  the  notices 
provided  in  subdivision  (b)  of  paragraph  two  of  this 
section.  The  advertisement  shall  be  at  the  expense  of 
the  converting  bank,  prepaid  to  the  department. 

[Publishers'   note,   re   Section  56a,   as   amended   1921: 

This  amendment  adds,  in  the  first  paragraph,  a  proviso  permitting  the  super- 
intendent, in  his  discretion,  upon  application  for  conversion  of  a  state  bank  into  a 
national  banking  association,  to  revoke  any  and  all  licenses  for  branch  ofB.ces 
granted  within  two   years   immediately  preceding   such   application.] 

Bank^organized  under  Section  56b.  Any  banking  corporation  organized  un- 
become  State  bank,  der  the  laws  of  the  United  States  and  doing  business  in 
this  state  may  become  an  incorporated  bank  of  this  state 
with  all  the  powers  and  subject  to  all  the  obligations  and 
duties  of  banks  organized  under  the  provisions  of  this  act, 
provided  such  banking  corporation  has  authority  by  virtue 
of  any  law  of  the  United  States,  to  dissolve  its  organiza- 
tion as  a  national  banking  corporation.  A  national  bank- 
ing corporation  desiring  to  become  such  an  incorporated 
bank  of  this  state  shall  proceed  in  the  following  manner: 

Procedure  for  legal       It  shall  take  such  action,  in  the  manner  prescribed  or 

dissolution  of  such 

national  banking  authorized  by  the  laws  of  the  United  States,  as  shall  make 

corporation  and 

creation  of  State  its  dissolution  as  a  national  banking  corporation  effective 

banking  corporation,  . 

at  a  future  date  certain. 

A  majority  of  its  directors  shall  thereafter  and  before 
the  time  when  its  dissolution  becomes  effective,  subscribe 
and  acknowledge  in  duplicate  upon  the  authority  in  writ- 
ing of  the  owners  of  at  least  two-thirds  of  its  capital  stock, 
the  articles  of  incorporation  required  by  section  two  hun- 
dred ninety  of  the  Civil  Code  of  California,  and  attach 
thereto  copies  of  the  said  written  authority  of  stockhold- 
ers and  the  resolution  fixing  the  date  at  which  its  dissolu- 
tion as  a  national  banking  association  shall  become  ef- 
fective, executed  in  the  same  manner  as  said  articles  of 
incorporation. 

[78] 


GENERAL  PROVISIONS  §  56b 

It  shall  thereupon  take  such  action,  in  the  manner  pre- 
scribed or  authorized  by  the  laws  of  the  State  of  Califor- 
nia, as  shall  create  a  corporation  for  the  purposes  set  forth 
in  the  said  articles  of  incorporation. 

It  shall  thereafter  and  before  the  time  when  its  disso- 
lution becomes  effective,  make  application  to  the  super- 
intendent of  banks  for  his  certificate  of  authorization  to 
transact  business  as  is  prescribed  in  sections  one  hundred 
twenty-seven  and  one  hundred  twenty-eight  of  this  act. 

If  the  superintendent  of  banks  shall  issue  his  certificate  when  corporate 

existence  begins. 

of  authorization  to  transact  business,  its  corporate  exist- 
ence as  a  state  bank  shall  begin  as  soon  as  its  dissolution 
as  a  national  banking  corporation  becomes  effective.  But 
such  bank  shall  transact  no  business  as  a  state  bank  other 
than  that  relating  to  its  organization  until  it  shall  have  re- 
ceived the  said  certificate  of  authorization  of  the  superin- 
tendent of  banks. 

At  the  time  when  the  corporate  existence  of  said  state  property  of  dissolved 

■  ,      ,  .  ,,1  f      1  1-         1         J  ..•  1    banking  association, 

bank  begms   all   the   property  or  the   dissolved    national  by  act  of  law,  vests  in 

1      11    .  1-11  f   1  J    S***^  bank. 

banking  association  shall  immediately  by  act  ot  law  and 
without  any  conveyance  or  transfer  be  vested  in  and  be- 
come the  property  of  such  state  bank.     The  directors  of  Directors  of  dissolved 

'^  .         1       .  corporation  to  be 

the  dissolved  corporation  at  the  time  of  such  dissolution  directors  of  bank 

created  hereunder, 

shall  be  the  directors  of  the  bank  created  in  pursuance  ^."^*„'^„f|*r^°t°"g^  ^^^'=" 
hereof  until   the   first  annual   election  of  directors  there-  thereafter. 
after,  and  shall  have  power  to  take  all  necessary  measures 
to  perfect  its  organization,  and  to  adopt  such  regulations 
concerning  its  business  and  management  as  may  be  proper 
and  not  inconsistent  with  law. 

[Publishers'  note,  re  Section  56b,  new,  enacted  1921: 

This  new  section  provides  the  procedure  by  which  a  national  banking  associ- 
ation may  become  an  incorporated  state  bank.  The  national  bank  shall  arst  take 
such  action  as  is  necessary  to  make  its  dissolution  effective  at  a  future  date  cer- 
tain. Thereafter  the  directors  shall  execute  articles  of  incorporation  and  secure 
the  certiacate  from  the  superintendent  authorizing  it  to  carry  on  a  banking  busi- 
ness. If  the  superintendent  issues  his  certiacate  of  authorization,  its  corporate 
existence  as  a  state  bank  shall  begin  as  soon  as  its  dissolution  as  a  national  bank 
becomes  effective,  and  all  the  property  of  the  national  bank  becomes  by  act  of 
law  vested  in  the  state  bank,] 

[791 


§  57-57a  BLYTH.  WITTER  &   CO. 


Lien  of  tax  assess-       Scction  57.      Whenever  in  this  act  it  b  required  that 

ment  or  bond  levied  i  i  /•  i«  1 

or  issued  by  State  Joans  or  investments  shall  be  secured  by  a  first  lien  on  real 

or  subdivision  there-  . 

of,  if  same  or  in-  estate,  the  lien  or  any  t8«,  assessment  or  bond  levied  or 

stallment  thereof  not  '  ^  •  j  i_ 

delinquent,  not  issued  by  this  State  or  by  any  county,  city  and  county, 

deemed  prior  en-      ^  ....  i  i     i«   ^   •    .  i  i.'  J* 

cumbrance  as  re-  City,  town,  municipality,  school  district,  reclemiation  dis- 

gards  requirement        ....  ...  i  i»i»i 

of  first-lien  real-  trict,  irrigation  district  or  any  other  political  or  govern- 
.  ^^^j^  subdivision  of  this  state  (not  including  bonds 
given  pursuant  to  any  law  authorizing  the  same  by  any 
person  or  corporation  in  lieu  of  payment  of  any  tax  or 
assessment  levied  against  any  particular  real  property) 
and  the  lien  of  any  assessment  levied  to  pay  such  bonds 
shall  not  be  deemed  to  be  a  prior  encumbremce  or  lien 
on  such  real  property  unless  an  installment  or  call  of 
such  tax,  assessment  or  bond  shall  be  due  and  delinquent; 
Bonds  given  pursu-  ^^^  g^y  fconds  given  pursuant  to  any  law  authorizing  the 

ant  to  law,  by  any  ^  =  «-  .  '        .  e 

person  or  corpora-  same  bv  any  persou  or  corporation  in  lieu  of  payment  of 

tion,  in  lieu  of  pay-  j  j    f  *r  ^  'ii 

ment  of  tax  or  as-  g^nv  tax  or  assessment  levied  against  any  particular  real 

sessment  upon  real         •'  ...  f 

property,  and  lien  nfopertv  and  any  lien  given  to  secure  the  payment  of 

securing  payment  *-       r        j  .7  .  •  e 

of  assessments  or  assessments  or  subscriptions  to  meet  the  requirements  or 

subscriptions  in  re-  ,  ... 

respect  to  u.  s.  irriga-  gj^y  j^^  of  thg  United  States  m  respect  to  any  irrigation 

tion  project  in  this  ^  e>  •         i  •  l_*L  L 

State,  which  may  be  project  of  the  United  States  in  this  state  which  may  be 

levied,  under  law  of  •         i    i  •  • 

V.  s— when  not  levied,  made  or  received  by  any  corporation  or  associa- 

deemed  prior  en-     ...  ii*  j*  t.         £ 

cumbrance  or  lien,  tiou  formed  to  Carry  out  the  objects  and  requirements  or 
any  such  law  of  the  United  States  shall  not  be  deemed  to 
be  a  prior  encumbrance  or  lien  on  such  real  property  if 
the  lien  given  to  secure  such  assessments  and  subscrip- 
tions taken  with  the  loan  or  investment  so  secured  shall 
eunount  to  not  more  than  sixty  per  centum  of  the  meurket 
value  of  the  land  securing  the  same. 

Priority  of  liens.  Section  5  7a.  Whenever  in  this  act  it  is  required  that 
loans  or  investments  shall  be  secured  by  a  first  lien  on 
real  estate,  any  lien  given  to  secure  the  payment  of  assess- 
ments or  subscriptions  to  meet  the  requirements  of  any 
law  of  the  United  States  in  respect  to  any  irrigation  pro- 
ject of  the  United  States  which  may  be  levied,  made  or 
received  by  any  corporation  or  association  formed  to 
carry  out  the  objects  and  requirements  of  any  such  law 

[801 


GENERAL  PROVISIONS §  57a-58 

of  the  United  States,  or  the  lien  of  any  tax,  assessment  or 
bond  levied,  or  issued  by  any  state  in  the  United  States 
other  than  the  State  of  California  or  by  any  county,  city 
and  county,  city,  tow^n,  municipality,  school  district  or  any 
other  political  or  governmental  subdivision  of  such  state 
and  the  lien  of  any  assessment  levied  to  pay  such  bonds 
shall  be  deemed  to  be  a  prior  encumbrance  or  lien  on 
such  real  property;  provided,  however,  that  with  the  pre-  g°"^®^* "/ 
vious  written  consent  of  the  superintendent  of  banks  any  sary  to  obtain. 
bank  may  make  loans  or  investments  upon  the  security 
of  real  property  so  encumbered  if  the  total  of  all  such 
liens  taken  with  the  loan  or  investment  so  secured  shall 
amount  to  not  more  than  fifty  per  cent  of  the  market 
value  of  the  real  property  securing  the  same;  and  pro- 
vided, further,  that  the  superintendent  of  banks  shall 
grant  no  such  permission  in  the  event  that  the  payment 
of  any  installment  or  call  of  any  such  tax,  assessment  or 
bond  or  other  governmental  lien  is  due  and  delinquent. 

[Publishers'  note,  re  Section  57a,  1921: 

This  new  section  provides  that  whenever  in  this  Act  it  is  required  that  loans 
or  investments  should  be  secured  by  a  lien  on  real  estate,  the  lien  of  any  tax 
assessment  or  bond  levied  or  issued  by  any  State  other  than  the  State  of  California 
or  by  any  county  or  other  governmental  subdivision  of  such  State,  and  the  lien  of 
any  assessment  levied  to  pay  such  bonds,  shall  be  deemed  to  be  a  prior  incumbrance 
or  lien;  provided,  however,  that  with  the  previous  written  consent  of  the  super- 
intendent, loans  or  investments  may  be  made  upon  the  security  of  property  so  in- 
cumbered, if  the  total  of  such  liens,  taken  with  the  loan  or  investment  so  secured, 
shall  amount  to  not  more  than  fifty  per  cent,  of  the  marke*  value. 

The  superintendent  shall  grrant  no  such  permission  if  the  payment  of  any  in- 
stallment or  call  for  any  such  tax  assessment  or  bond  is  due  and  delinquent.] 

Section    58.      Any  bank  possessing  a  capital  and  sur-  f^l^^l^^^oZl^l^ore 
plus  of  one  million  dollars  or  more  may  file  application  ^^^^g'^^^.TJ  ^e^^^it. 
with  the  superintendent  of  banks  for  permission  to  exer- 
cise, upon  such  conditions  and  under  such  regulations  as 
he  may  prescribe,  either  or  both  of  the  following  powers: 

First — To  establish  branches  in  foreign  countries  or  in  1st.   To  establish 

foreign  branches,  and 

dependencies  or  insular  possessions  of  the  United  States  act  as  fiscal  agents 

^  of  U.  a. 

for  the  furtherance  of  the  foreign  commerce  of  this  state 
and  of  the  United  States  and  to  act  if  required  to  do  so  as 
fiscal  agents  of  the  United  States. 

[8!] 


§  58  BLYTH.  WITTER  &  CO. 

2nd.   To  invest  not       Sccond — To   invest  an   amount  not  exceeding  in   the 

exceeding  specified 

percentages  of  paid-in  aggregate  ten  per  centum  of  its  paid-in  capital  stock  and 
surplus  in  stock  of  surplus  in  the  stock  of  one  or  more  banks  or  corporations 

state  or  T7.  S.  banks  '^ 

engaged  in  foreign  chartered  or  incorporated  under  the  laws  of  the  State  of 

banking;  or  in  facili- 
tating foreign  exporta-  California,  or  of  the  United  States,  or  of  any  state  thereof, 

tion  from  V.  S.  or  its  '  ./  » 

dependencies,  etc.  and  principally  engaged  in  international  or  foreign  bank- 
ing or  banking  in  a  dependency  or  insular  possession  of 
the  United  States  either  directly  or  through  the  agency, 
ownership  or  control  of  local  institutions  in  foreign  coun- 
tries, or  in  such  dependencies  or  insular  possessions. 

Any  bank,  without  regard  to  the  amount  of  its  capital 
and  surplus,  may  file  application  with  the  superintendent 
of  banks  for  permission,  upon  such  conditions  and  under 
such  regulations  as  may  be  prescribed  by  said  superin- 
tendent of  banks,  to  invest  an  amount  not  exceeding  in 
the  aggregate  five  per  centum  of  its  paid-in  capital  and 
surplus  in  the  stock  of  one  or  more  corporations  char- 
tered or  incorporated  under  the  laws  of  the  United  States 
or  of  any  state  thereof,  and,  regardless  of  its  location, 
principally  engaged  in  such  phases  of  international  or  for- 
eign financial  operations  as  may  be  necessary  to  facilitate 
the  export  of  goods,  wares  or  merchandise  from  the  United 
States  or  any  of  its  dependencies  or  insular  possessions  to 
any  foreign  country;  provided,  how^ever,  that  in  no  event 
shall  the  total  investments,  authorized  by  this  section  by 
any  bank  exceed  ten  per  centum  of  its  paid-in  capital  and 
surplus;  provided,  also,  that  such  investments  may  be  car- 
ried in  either  the  commercial,  savings  or  trust  department, 
or  may  be  apportioned  to  any  two  or  all  three  of  such 
departments  of  any  departmental  state  bank. 

Such  application  shall  specify  the  name  and  capital  of 

the  bank  filing  it,  the  powers  applied  for  and  the  place 

or  places  where  the  banking  or  financial  operations  pro- 

Supt.  may  approve  posed  are  to  be  carried  on.     The  superintendent  of  banks 

or  reject  application      i      n   i  •       ^  1_  1*       i.* 

in  whole  or  part,  shall  have  power  to  approve  or  to  reject  such  appncation 
in  whole  or  in  part  if  for  any  reason  the  granting  of  such 
application  is  deemed  inexpedient,   and  shall  also  have 

[821 


GENERAL  PROVISIONS §  58 

power  from  time  to  time  to  increase  or  decrease  the  num- 
ber of  places  where  such  banking  operations  may  be  car- 
ried on. 

Every  bank   operating   foreign   branches   shall   be   re- 

.,  f-i-r  •  -L  !••  t.    Information  re  con- 

quired  to    rurnish  inrormation  concernmg  the  condition  or  dition  of  foreign 

,,,  I  .i  cil  J         branches,  etc.,  to  be 

such  branches  to  the  superintendent  or  banks  upon  de-  furnished  Supt.  on 
mand,  and  every  bank  investing  in  the  capital  stock  of 
banks  or  corporations  hereinbefore  described  in  this  sec- 
tion, shall  be  required  to  furnish  information  concerning 
the  condition  of  such  banks  or  corporations  to  the  super- 
intendent of  banks  upon  demand,  and  the  superintendent 
of  banks  may  order  special  examinations  of  the  said 
branches,  banks  or  corporations  at  such  time  or  times  as 
he  may  deem  best.  The  cost  of  such  special  examina- 
tions shall  be  paid  by  said  branches,  banks  or  corpora- 
tions. 

Before  any  bank  shall  be  permitted  to  purchase  stock 
in  any  such  corporation  the  said  corporation  shall  enter 
into  an  agreement  or  undertaking  with  the  superin- 
tendent of  banks  to  restrict  its  operations  or  conduct  its 
business  in  such  manner  or  under  such  limitations  and 
restrictions  as  the  said  superintendent  of  banks  may  pre- 
scribe for  the  place  or  places  wherein  such  business  is  to 
be  conducted.    If  at  any  time  the  superintendent  of  banks  if  regulations  of 

•'  Supt.  not  compuea 

shall  ascertain  that  the  regulations  prescribed  by  him  are  ^^ith.  he  may  insti- 

^  '^  11.      ^"*®  investigation, 

not  being  complied  with,  said  superintendent  of  banks  is 
hereby  authorized  and  shall  have  power  to  institute  an 
investigation  of  the  matter  and  to  send  for  persons  and 
papers,  subpoena  witnesses  and  administer  oaths  in  order 
to  satisfy  himself  as  to  the  actual  nature  of  the  transac- 
tions referred  to.  Should  such  investigation  result  in  es- 
tablishing the  failure  of  the  corporation  in  question,  or  of 
the  bank  or  banks  which  may  be  stockholders  therein,  to 
comply  with  the  regulations  laid  down  by  the  said  super- 
intendent of  banks,  such  banks  may  be  required  to  dis- 
pose of  stockholdings  in  the  said  corporation  upon  thirty 
days*   notice,    and   in   the   event  of  their   noncompliance 

[831 


§  60  BLYTH,  WITTER  &  CO. 

Such  bank  to  con-  with  such  Order  the  superintendent  of  banks  may  institute 

duct  accounts  of  , .  r         c       r    •  f  i  • 

each  foreign  branch  proceedings  lor  lorteiture  or  license. 

independently.  i      i  i         i      11  i  1  r  1 

hvery  such  bank  shall  conduct  the  accounts  or  each 
foreign  branch  independently  of  the  accounts  of  other 
foreign  branches  established  by  it  and  of  its  home  office, 
and  shall  at  the  end  of  each  fiscal  period  transfer  to  its 
general  ledger  the  profit  or  loss  accruing  to  each  branch 
as  a  separate  item. 

[Publishers'  note,  re  Section  58,   as  amended  1921: 

This  amendment  provides  that  banks  which  establish  branches  in  foreign  coun- 
tries or  dependencies  for  the  furtherance  of  foreign  commence  may  act,  if  required 
to  do  so,  as  fiscal  agents  of  the  United  States. 

Previous  to  this  amendment,  banks  might  invest  in  the  capital  stock  of  Cali- 
fornia corporations  principally  engaged  in  international  ct  foreign  banking.  The 
amendment  adds  corporations  incorporated  under  the  laws  of  the  United  States  or 
of  any  State. 

Previously,  also  only  banks  having  a  capital  of  a  million  or  more  dollars  might 
establish  such  branches  or  invest  in  such  corporations.  The  amendment  permits 
any  bank,  without  regard  to  the  amount  of  its  capital  and  surplus,  with  the  per- 
mission of  the  superintendent,  to  invest  not  exceeding  in  the  aggregate  five  per  cent 
of  its  paid-in  capital  and  surplus,  in  the  stock  of  one  or  more  corporations  char- 
.  t6red  or  incorporated  under  the  laws  of  the  United  States  or  of  any  State  thereof, 
and  regardless  of  its  location,  principally  engaged  in  such  phases  of  international 
or  foreign  finance  operations  as  may  be  necessary  to  facilitate  the  export  of 
goods,  wares  or  merchandise  from  the  United  States  or  any  of  its  dependencies  or 
insular  possessions  to  any  foreign  country.  The  total  investments  authorized  by 
this  section  shall  not  exceed  ten  per  centum  of  the  bank's  paid-in  capital  and  sur- 
plus. Such  investments  may  be  carried  in  either  the  commercial,  savings  or  trust 
department,  or  may  be  apportioned  to  any  two  or  all  three  of  such  departments.] 

ARTICLE  II. 

SAVINGS  BANKS. 
Capital  required  of       Section   60.      Evcry  savings  bank  hereafter  organized 

savings  banks.  ... 

must  have  paid  up  in  cash  a  capital  stock  not  less  than 
^"^"s^ooo— $25  000^        ^^^    Twenty-five  thousand  dollars  if  its  principal  place 
of  business  is  located  in  any  locality  the  population  of 
which  does  not  exceed  five  thousand  persons; 
If  5,000  to  25,000        (b)    Fifty   thousand   dollars   if   its   principal   place    of 

population— $50,000.  ..  .  ... 

business  is  located  in  any  city  the  population  of  which  is 
more  than  five  thousand  persons,   but  does  not  exceed 
twenty-five  thousand  persons; 
If  25,000  to  100  000        (^)    One    hundred    thousand    dollars    if    its    principal 

population — $100,000.  ^     '  r  r 

place  of  business  is  located  in  any  city  the  population  of 
which  is  more  than  twenty-five  thousand  persons  but  does 
not  exceed  one  hundred  thousand  persons; 

If  100,000  to  200,000  /J\      -r  L  J  1      iU  J      J     11  •£      'i  •        •         1 

population— $200,000.        (d)     1  WO    hundred    thousand    dollars    it   its    principal 
place  of  business  is  located  in  any  city  the  population  of 

[841 


SAVINGS  BANKS  §  60 


which  IS  more  than   one  hundred   thousand   persons  but  bonds  which  aee 

,  1  1  1         1      I  ,  LEGAL   INVEST- 

does  not  exceed  two  hundred  thousand  persons;  ments— Continued. 

(e)    Three   hundred    thousand   dollars   if   its   principal  if  ™°'"e  than  200.000 

,  r  1         •  -1  1    •  .1  ,  population — $300,000. 

place  or  business  is  located  in  any  city  the  population  of 
which  is  more  than  two  hundred  thousand  persons. 

Excepting    that    any    savings    bank    organized    w^ithout  Reserve  fund  of  sav- 

,  I  ,  !•  1         r  1  '"^■'^  Dank  without 

capital  stock  must  have  a  reserve  fund  or  at  least  one  capital  stock. 
million  dollars. 

Until    the   capital   stock   or   reserve   fund   hereinbefore  No  certificate  to  be 

11111  11  •   1     •  1  •  1  r    ^^sued  until  such 

required  shall  be  actually  paid  in,  the  superintendent  or  capital  stock  or  re- 

,,,,,.  .  ,  ._  -111.      serve  fund  is  paid  in. 

banks  shall  reruse  to  issue  the  certihcate  required  by  this 
act.  The  foregoing  classification  shall  not  apply  to  any  classification  not  to 
savings  bank  already  in  existence  w^hich  has  received  bank^. 
its  certificate  to  do  a  banking  business  from  the  superin- 
tendent of  banks;  nor  to  any  bank  the  location  of  which 
shall  have  been  included  by  annexation  or  consolidation 
within  the  limits  of  a  city  of  a  class  requiring  a  larger 
capitalization,  but  no  bank  thus  excepted  shall  be  per- 
mitted to  establish  any  new  branch  office  as  provided  in 
section  nine  of  this  act  or  to  remove  its  place  of  business 
from  the  original  limits  of  the  city  or  township  wherein 
it  was  located  prior  to  such  annexation  or  consolidation 
until  it  shall  have  the  capital  required  of  banks  in  such 
city  not  within  said  exception.     Such  excepted  banks  may  Excepted  banks  may 

.     .  1  .1.  '.iilli  •         not  decrease  but  may 

not  m  any  case  decrease  their  capital  stock  but  may  in-  increase  capital 

crease  the  same  in  the  manner  provided  by  law  to  an 

amount  either  greater  or  less  than  that  required  of  banks 

in    such   city   not   within    said    exception;    provided,    that 

nothing  herein  shall  be  construed  to  affect  the  provisions  Nothing  herein  af- 

_  fects  provisions  of 

of  section  nineteen  of  this  act  relative  to  the  proportion  Sec.  19  or  of  sec. 

28  of  Act. 

of  capital  and  surplus  to  deposits  or  of  section  twenty- 
three  of  this  act  relative  to  the  capital  stock  required  of 
banks  doing  a  departmental  business. 

The  provisions  of  section  twenty-three  of  this  act,  as  to  Bank  hereafter  or- 

gani?ed  in  locality 

population,  shall  apply  to  any  bank  organized  under  the  included  by  annexa- 
tion in  city  requir- 

provisions  of  this  section ;  provided,  however,  that  nothing  in&  larger  capitaliza- 
tion— paid-up  capital 

herein    contained    shall    prevent    the    superintendent    of  required. 

[85] 


§61 BLYTH.  WITTER  &  CO. 

^°^LEG^^iKVEsl^  banks  in  the  exercise  of  his  discretion  from  granting  his 
MENTS— Continued,  license  to  any  bank  hereafter  organized  in  a  locality  which 
has  been  included  by  annexation  or  consolidation  within 
the  limits  of  a  city  requiring  a  larger  capitalization  with  a 
capital  stock  paid  up  in  cash  equal  to  that  which  would 
have  been  required  for  said  locality  if  it  had  not  been  in- 
cluded by  annexation  or  consolidation  within  the  limits  of 
a  city  requiring  a  larger  capitalization;  provided,  that  no 
bank  so  licensed  shall  be  permitted  to  establish  any 
branch  office  as  provided  in  section  nine  of  this  act  or  to 
remove  its  place  of  business  from  the  original  limits  of  the 
city  or  township  which  has  been  included  by  annexation 
or  consolidation  within  the  limits  of  a  city  requiring  a 
larger  capitalization  until  it  shall  have  the  capital  required 
of  banks  in  such  city  requiring  said  larger  capitalization. 

[Publishers'   note,  re   Section  60,   as  amended  1921; 

This  amendment  adds  the  same  provision  that  was  added  to  Section  23,  viz. : 
fhat  the  superintendent,  in  his  discretion,  may  grant  a  license  to  a  bank  there- 
after organized  in  a  locality  which  has  been  included  by  annexation  or  consolida- 
tion within  the  limits  of  a  city  requiring  a  larger  capitalization,  with  the  capital 
that  would  have  been  required  if  it  had  not  been  so  included,] 

Section  6 1 .  Any  savings  bank  may  purchase,  hold 
or  sell  real  or  personal  property,  as  follows: 

Property  which        ],   Jhe  lot  and  building  in  which  the  business  of  the 

savings  bank  may  ^ 

purchase,  hold  and  bank  is  Carried  on ;  furniture  and  fixtures,  vaults  and  safe 

convey. 

deposit  vaults  and  boxes  and  other  personal  property 
such  as  may  be  necessary  or  proper  to  carry  on  its  bank- 
ing business;  such  lot  and  building,  furniture  and  fixtures, 
vaults  and  safe  deposit  vaults  and  boxes  shall  not,  in  the 
aggregate,  be  carried  on  the  books  of  such  bank  as  an 
asset  to  an  amount  exceeding  its  paid-up  capital  and  sur- 
plus; and  hereafter,  the  authority  of  a  two-thirds  vote  of 
niture,  fixtures,' etc.,  all  of  the  directors  shall  be  necessary  to  authorize  the 
directors  necessary  purchase  of  such  lot  and  building,  or  the  construction  of 

for  purchase  or  11       Ml- 

construction.  SUch    building. 

Property  mortgaged,        2.   Such   as   may   have   been   mortgaged,    pledged    or 

pledged  or  conveyed  .  . 

as  security  for  conveyed  to  it  in  trust  for  its  benefit  in  good  faith,  for 

loans. 

money  loaned  in  pursuance  of  the  regular  business  of  the 
corporation. 

[861 


SAVINGS  BANKS  §  6  I 


3.  Such    as   may   have   been    purchased    at   any    sales  bonds  which  are 
under   pledge,    mortgage   or   deed   of   trust  made   for   its  ments— Continued. 
benefit  for  money  so  loaned   and   such  as  may  be  con-  TrsaieTunderSo. 
veyed  to  it  by  borrowers  in  satisfaction  and  discharge  of  '^"^^ei^s^,  etc. 
loans  made  thereon. 

4.  Gold  or  silver  bullion,  and  United  States  mint  cer-  Bullion,  mint 

_  ^  -11  certificates. 

tmcates  of  ascertained  value. 

5.  Bonds  and  other  securities  of  the  following  classes :  Bonds  and  other 

securities,  viz. : 

(a)  Bonds  or  interest-bearing  notes  or  obligations  of  Bonds  or  interest- 

.-  ^  ^.      bearing  notes  or 

the  United  States,  or  those  for  which  the  faith  and  credit  obligations  of  v.  s., 
of  the   United   States   are   pledged   for  the   payment   of 
principal  and  interest; 

(b)  Bonds   of  the  State  of  California,   or  those   for  Bonds  of  this  state 

,  .  or  its  subdivisions, 

which  the  faith  and  credit  of  the  State  of  California  are 
pledged  for  the  payment  of  principal  and  interest,  or 
those  of  any  county,  city  and  county,  city  or  school  db- 
trict  of  this  state; 

(c)  Bonds  or  stocks  or  notes  of  any  state  in  the  United 
States,  other  than  the  State  of  Czdifornia,  that  has  not, 
within  twenty-five  years  previous  to  making  such  invest- 
ment by  such  bank,  defaulted  in  the  pajrment  of  any  part 

of  either  principal  or  interest,  or  those  of  any  county,  city  f;^^^3't\°tti;u?s., 
and  county,  city  or  town,  or  school  district,  in  any  state  °[,;^„^7„;°""i*y,„y 
of  the  United  States  other  than  the  State  of  California,  is-  l"/f^f^-f;'^l°^^-.^- 
sued   under  authority  of  any  law   of  such  state,   which  1^^°^"^^^^"^^^^°^'/^^ 
county,  city  and  county,  city  or  town,  or  school  district, 
had,  as  shown  by  the  federal  or  state  census  next  preced- 
ing such  investment,  a  population  of  more  than  twenty 
thousand  inhabitants;  provided,  however,  that  the  entire 
bonded  indebtedness  of  such  county,  city  and  county,  city 
or  town,  or  school  district,  including  such  issue  of  bonds  or 
stocks  or  notes,  does  not  exceed  fifteen  per  centum  of  the 
value  of  the  taxable  property  therein  as  shown  by  its  last 
equalized  assessment  roll;  and  provided,  further,  that  such 
county,  city  and  county,  city  or  town,  or  school  district, 
or  the  state  in  which  it  is  located  has  not  defaulted  in  pay- 
ment of  any  part  of  either  principal  or  interest  due  upon 

[87] 


§  6  I  BLYTH.  WITTER  &   CO. 

BONDS  WHICH  ARE  anv  legeJlv  authorized  bond  or  stock  or  note  issue  within 

LEGAL   INVEST-  r  !•  i     • 

MENTS— Continued,  twenty-five  ycars  next  precedmg  such  investment; 

Bonds  of  any  dis-        (J)    Bonds  of  2iny  distrlct  organized  under  the  laws 

trict  organized  under  ^      '  •'  ° 

laws  of  State  ap-  of  ^^  State  of  California  which  are  required  to  be  and 

proved  by  commis-  ^ 

sion  under  State  law.  ^^^  investigated  and  approved  by  a  commission  now  or 
here2ifter  authorized  by  a  law  of  this  state  to  conduct 
such  investigation  and  give  such  approval  and  by  author- 
ity of  which  approval  said  bonds  are  decleured  to  be  legal 
investments  for  savings  bemks; 
Notes  or  bonds       ( e )    Notes  or  bonds  secured  by  mortgage  or  deed  of 

secured  by  mortgage  ^         ^  "  , 

at  deed  of  trust,  trust,  pajmient  of  which  is  guaranteed  by  a  policy  of  mort- 

payment  guaranteed  .  .... 

by  mortgage  insur-  geigc  msuTance,  and  mortgage  participation   certificates, 

ance  and  mortgage  .  .    ,  .  .  , 

participation  certs,  issued  by  a  mortgeige  uisurance  compeuiy  m  accordance 
with  the  provisions  of  chapter  eight  of  title  two  of  part 
four  of  division  first  of  the  Civil  Code. 
Bonds,  securities       6.   Bonds  and  othcr  securities  of  the  following  classes; 

purchasable  after  cer-  'iii  111  •• 

tification  by  Supt.  provided,  that  such  bonds  or  securities  sheJl  first  have 

under  §61a,  viz. :  •/•      1     1  1  • 

been  certified   by  the  supenntendent  of  bemks  after  an 
investigation  eis  provided  for  imder  section  sixty-one  a  of 
this  act; 
Bonds  etc.,  of,  or        (a)    Bonds  or  intcrest-bearing  notes  or  obligations  of 

pledged  by  any  ^     '  00 

foreign  country,  etc.  any  foreign  country  or  government,  or  those  for  which 
the  faith  and  credit  of  any  foreign  country  are  pledged 
for  the  payment  of  principal  and  interest; 
Bonds  of  irrigation        (b)    Bonds  of  any  district  orgsmized  under  the  laws  of 

district  outside  of  .  .  . 

California  approved  any  State  in  the  United  States  other  than  the  State  of  CaJi- 

by  Commission,  ,  ,...,,  .,.  11. 

within  debt  limita-  tomia  for  the  purpose  of  irrigating  lands  within  such  dis- 
trict, which  are  required  to  be  emd  are  investigated  and 
approved  by  a  commission  now  or  hereafter  authorized 
by  a  law  of  said  state  to  conduct  such  investigation  and 
give  such  approved ;  provided,  that  the  entire  indebtedness 
of  such  district,  including  the  bonds  under  consideration, 
and  all  prior  liens,  within  the  meeming  of  section  fifty- 
seven  a  of  this  act,  do  not  exceed  fifty  per  centum  of  the 
aggregate  market  value  of  the  lands  within  said  district, 
and  of  the  irrigation  system  owned  or  to  be  acquired  by 
said  district  with  the  proceeds  of  said  bonds; 

[88] 


SAVINGS  BANKS  §  6  I 


(c)  Bonds  of  any  district  organized  under  the  laws  of  ???ds  which  are 
the  State  of  California  not  otherwise  provided  for  in  this  ments— continued. 

..  Bonds  of  any  Cali- 

SeCtlOnj  fornia  district,  not 

otherwise  provided 

(d)  (1)    Bonds   of  zmy  railroad  corporation,   as  the  forinSec. 
same  is  defined  in  the  "public  utilities  act,"  incorporated 

under  the  laws  of  any  state  in  the  United  States  and  oper-  ^"""^^  °^  *°y  "'^*'i- 

,.-,_,  road  corporation,"  as. 

atmg  exclusively  in  the  United  States;  provided,  that  said  leaned  in  "public 

,,,,,,  .  utilities  act."  oper- 

corporation  shall  have  had  net  earnings  for  either  its  fiscal  **'"s  in  u.  s.,  with 

,  ,  specified  net  earnings. 

year  or  twelve  consecutive  months  in  the  fourteen  months 
next  preceding  application  for  certification  of  said  bonds 
under  the  provisions  of  section  sixty-one  a  of  this  act, 
amounting  to  at  least  one  and  one-heJf  times  the  interest 
on  all  bonded  indebtedness  outstanding  at  the  time  of 
said  certification,  and  on  all  additionsJ  bonds  then  pro- 
posed to  be  issued;  or, 

(2)    Bonds  of  any  railroad  corporation,  the  payment  so^n'^g  ^^ '^^   ^  ^ 
of  which  is  guaranteed,  both  as  to  principal  and  interest,  oHMch °is  g^lran"* 
by  a  railroad  corporation,  whose  bonds  are  a  legal  invest-  t^ed  by  r.  a.  cm- 

"^  "^  '  ^  poration,  etc. 

ment  for  savings  banks  in  this  state. 

(e)  (1)  Bonds  of  any  other  public  utility  corporation,  IJ^jj^oWn  g^^^^^ 
as  the  same  is  defined  in  the  "public  utilities  act,"  incor-  P"^'i^  "*'|.'ty  '=°j-   , 

*^  '  poration,  defined  and 

porated  under  the  laws  of  any  state  in  the  United  States  operating  as  above. 
and  operating  exclusively  in  the  United  States;  provided, 
that  said  corporation  shsdl  have  had  net  earnings  for 
either  its  fiscal  year  or  twelve  consecutive  months  in  the 
fourteen  months  next  preceding  application  for  certifica- 
tion of  said  bonds  under  the  provisions  of  section  sixty- 
one  a  of  this  act,  amounting  to  at  least  one  and  one-hedf 
times  the  interest  on  all  bonded  indebtedness  outstanding 
at  the  time  of  said  certification,  and  on  edl  additional 
bonds  then  proposed  to  be  issued ;  or, 

(2)    Bonds  of  any  similar  public  utility  corporation,  firiar*pubHc°utiiifj 
the  payment  of  which  is  guaranteed,  both  as  to  principal  corporation. 
and  interest,  by  a  public  utility  corporation  other  than  a 
railroad  corporation,  whose  bonds  are  a  legal  investment 
for  savings  bemks  in  this  state. 

[89] 


§61  BLYTH,  WITTER  &  CO. 


BONDS  WHICH  ARE       [^  determinuis:  the  income  of  any  railroad  or  other  pub- 

LEGAL  INVEST-  ^"^  ^  ii-  iiii_« 

MENTS— Continued.  j|j.  utility  Corporation  mentioned  herein,  there  shall  be  in- 
income  of  above  cor-  cJmJed  the  income  of  any  corporation  or  corporations  out 

porations — how  i»i« 

determined,  ^f  which  it  shall  have  been  formed  through  consohdabon 

or  merger,  2uid  of  any  corporation  the  entire  business  and 

income-producing  property  of  which  the  corporation  b- 

suing  such  bonds  has  wholly  acquired. 

Nature  of  security       ^jj  bonds  issued  by  a  railroad  or  other  public  utility 

required  for  R.  R.  ^  j        j        f 

or  other  public  utility  corporation  Riust  be  securcd  by  a  mortgage  or  deed  or 

company  bonds: 

trust  which  at  the  time  of  said  certification  is:  either 
Closed  first  mortgage       j^      j^  closed  first  mortgage  or  deed  of  trust;  or, 

or  deed  of  trust,  or  53    sa 

First  mortgage  or       jj^      \  fiYst  mortgage  or  deed  of  trust  containing  pro- 
deed  of  trust  with  ^      ^  ^  rri_LJ  «.'l 

Testrictions  on  issuing  visions    restricting   the   issuance    of   further    bonds   until 

further  bonds ;  or  =^  r  •  i  •  i_     11    L 

such  time  as  the  income  of  said  corporation  shall  have 
been  at  least  sufficient,  during  the  twelve  months  next 
preceding  the  bsuance  of  amy  additional  bonds,  to  meet 
the  earning  requirements   heretofore  specified   in   either 
paragraph  (d)  or  (e)  of  subdivision  6  of  this  section  ap- 
plicable to  such  corporation  arfter  including  the  additional 
bonds  then  proposed  to  be  issued;  or, 
Refunding  mtge.  or        HI.   A  refunding  mortgage  or  deed  of  trust  providing 
Tiding  for  retirement  for  the  retirement  of  all  prior  lien  mortgage  debts  of  said 
prior  len^'^^ge^  corporation,  gmd  restricting  the  issuance  of  further  bonds 
until  such  time  as  the  income  of  said  corporation  shall 
have  been  at  least  sufficient,  during  the  twelve  months 
next  preceding  the  issuance  of  any  additional  bonds,  to 
meet  the  earning  requirements  of  such  corporation  after 
including  the  additional  bonds  then  proposed  to  be  is- 
sued ;  or. 
Underlying  or  di-        IV.   An  Underlying  or  divisional  closed  mortgage  or 
TrTeed  of  trust  prfp-  dccd  of  trust  of  property  which  forms  a  part  of  the  oper- 

erty  forming  part  of         ,  *      i  .•  .l_  •  'J  _ 

the  operating  system  ating  system  of  the  Corporation  then  owning  said  prop- 
of  owning  corpora-  ^^^^      j^  ^j^^  ^^^^  ^j  ^^^^^  sccured  by  an  Underlying  or 

divisional  closed  mortgage  or  deed  of  trust,  the  net  in- 
come required  by  this  section  shall  be  based  exclusively 
upon   the   income,    maintenance    charges,    operating   ex- 


1901 


SAVINGS  BANKS  §  6  I 

penses,  taxes,  and  mortgage  indebtedness  of  or  against  ^°^^?  ^^Ul^  ^^^ 
the  property  covered  by  such  underlying  or  divisional  ments— Continued, 
closed  mortgage  or  deed  of  trust,  or,  if  such  income, 
maintenance  charges  or  operating  expenses  can  not  be 
definitely  ascertained,  on  the  proper  proportionate  share 
of  such  property  in  the  general  income,  maintenance 
charges,  operating  expenses,  and  teixes  of  the  corpora- 
tion then  owning  such  property  and  on  the  mortgage  in- 
debtedness of  or  against  the  property  covered  by  such 
underlying  or  divisional  closed  mortgage  or  deed  of  trust. 

(f )  Notes  or  bonds  secured  by  first  mortgage  or  deed  cured  by  tirst  mort- 
of  trust  or  other  first  lien  upon  real  estate,  improved  or  or  oti°e'r  ist  uen  ^^ 
unimproved;  provided,  that  the  entire  note  or  bond  issue 
shall  not  exceed  sixty  per  centum  of  the  market  value  of 
such  real  estate,  or  such  real  estate  with  improvements, 
taken  as  security;  and  provided,  further,  in  case  the  said 
note  or  bond  issue  is  created  for  a  building  loan  on  real 
estate,  that  at  no  time  shall  the  entire  outstanding  note  or 
bond  issue  exceed  sixty  per  centum  of  the  market  value 
of  the  real  estate  and  the  actual  cost  of  the  improvements 
thereon  taken  as  security;  and  provided,  also,  in  case  said  \ 

real  estate  is  located  outside  of  thb  state,  that  the  provi-  "^ 

sions  of  this  pauragraph  shall  be  subject  to  the  limitations  i^^^\ 
and  modifications  contained  in  section  fifty-seven  a  of  this 
act;  and  provided,  also,  that  no  such  notes  or  bonds  shall 
be  disqualified  as  investments  for  savings  bauiks  for  the 
reason  that  the  payment  thereof  is  guaranteed  by  a  policy 
of  mortgage  insurance. 

In   determining  the  market  value   of  any  real  estate  where  real  estate 

=•  •'  etc.,  consists  of  oil 

under  the  provisions  of  the  preceding  psuragraph  where  "mberian'd""he  °' 
such  real  estate,  improved  or  unimproved,  consists  of  oil  'a'"^  1^  °'i  mineral 

'  "^  •^  '  or  timber  not  in- 

or  other  mineral  or  timber  land,  the  value  represented  by  eluded  in  fixing 

'  market  value. 

such  oil  or  other  mineral  or  timber  shall  not  be  included 
in  fixing  such  market  value.  Nothing  herein  contained 
shall  prevent  savings  banks  from  making  loams  secured  Redwood  timber  may 

*^  ^  .11^^  included  in  fixing 

by  mortgage  or  deed  of  trust  upon  lands  wherein  redwood  market  value. 
timber  is  included  in  fixing  the  market  veJue  thereof. 

[91] 


/ 


§  6 1  BLYTH,  WITTER  &  CO. 


BONDS  wHic^ARE       ^^y  bank,  however,  may,  without  such  certification  by 

MENTS— Continued.  j}jg  superintendent  of  banks,  purcheise  any  note  or  bond 

When  bank  may,  q,.  iggue  of  notes  or  bonds  provided  for  in  said  paragraph 

without  certification  *^  «  ^       . 

by  supt.,  purchase  (f )  of  subdivision  six  of  this  section,  whenever  such  pur- 
notes  or  bonds  under    ^    ' 

par.  (f)  subd.  six  of  chase  constitutes   the  entire  amount  of  notes   or  bonds 

this  Sec. 

executed  by  the  makers  thereof  and  secured  by  the  seune 
real  estate;  provided,  that  no  savings  bank  shall  hold  any 
such  notes  or  bonds  unless  such  holding  constitutes  the 
entire  bsue  thereof  at  any  time  outstanding;  and  provided, 
also,  that  nothing  in  this  paragraph  sheJl  be  construed  to 
permit  savings  banks  to  invest  in  notes  or  certificates  evi- 
dencing psurticipation  in  any  mortgage  on  real  estate  un- 
less by  law  specifically  authorized,  or  in  or  on  any  form  of 
obligation  secured  by  any  undivided  interest  in  real  estate 
designed  to  distribute  the  obligation  so  secured. 
Collateral  trust  bonds        (g)    Collateral  tTust  bonds  or  notes  when  secured  by 

or  notes  secured  by —      , 

either : 
Deposit  of  notes  or       ( 1 )    Deposit  of  notes  or  bonds  authorized  for  invest- 
i°nve^stment  by  Sec,  ment  by  this  sectiou  of  a  market  value  at  least  fifteen  per 
speci  e  n^ar^e   ^^^^^^^^  j^^  excess  of  the  par  value  of  the  collateral  trust 

bonds  or  notes  issued;  or. 

Deposit  of  notes  or       /  o )    DeDosit  of  notes  or  bonds  authorized  for  invest- 

bonds  so  authorized  \      /  r  ...  i_«J 

by  this  Sec,  and  jnent  bv  this  section  and  other  securities  of  a  combined 

other  securities,  of  -^  ,  . 

combined  market  market  value  at  least  twenty  per  centum  m  excess  or  the 

value  and  of  par  ,  _ 

value,  as  specified,  par  value  of  the  collateral  trust  bonds  or  notes  issued ; 
provided,  that  the  par  value  of  said  collateral  trust  bonds 
or  notes  shall  in  no  case  exceed  the  market  value  of  that 
portion  of  the  security  represented  by  notes  or  bonds 
authorized  for  investment  by  this  section. 
R.  R.  eguipment        /j^\  Railroad  equipment  trust  certificates  or  obligations 

trust  certificates,  \-/  ^      ^  ^  i.ii 

issued  or  guaranteed,  jggued  or  ffuarguiteed  by  a  corporation  to  which  a  loan  or 

and  with  lien  o  •' 

priority,  as  specified,  j^ans  for  the  construction,  acquisition,  purchase  or  lease 
of  railroad  equipment  has  or  have  been  made  with  the 
approval  of  the  Interstate  Commerce  Commission;  pro- 
vided, that  the  entire  issue  shall  not  exceed  sixty  per 
centum  of  the  cost  of  such  equipment  and  shall  mature 
serially  not  later  than  fifteen  years  from  date  of  bsue; 

[921 


SAVINGS  BANKS §^ 

provided,  further,  that  said  certificates  or  obligations  must  ^°  legal^invest-^ 
be  secured  by  or  be  evidence  of  a  prior  lien  upon  or  reser-    ments— continued. 
vation  of  title  to  such  equipment,  or  by  an  assignment  of 
or  prior  interest  in  the  rent  or  purchase  notes  given  for  the 
hiring  or  purchasing  of  said  equipment. 

(i)  Acceptances  issued  by  a  discount,  acceptance  or  in-  ^^^diL'o'u^t'aS 
vestment  corporation  formed  under  the  Federal  statute  ZpolliZ^Tdlr'' 
commonly  known  as  the  "Edge  Act"  or  under  the  "In-  [^de^'^i  ^°^  ^t^te 
vestment  Companies  Act"  of  New  York,  or  by  a  corpora- 
tion of  identical  character  and  capacity,  organized  under 
the  laws  of  any  state  of  the  United  States. 

The  legality  of  investments  heretofore  lawfully  made  ^rtfilwf Jrwht 
pursuant  to  the  provisions  of  this  section,  or  of  any  law  "^^^^'^^^l^^^^^^^ 
of  thb  state  as  it  existed  on  and  subsequent  to  July  1, 
1909,  shall  not  be  affected  by  any  amendments  to  this 
section  or  thb  act;  nor  shall  any  such  amendments  re- 
quire the  changing  of  investments  once  lawfully  made 
under  this  act. 

Anv  bonds  authorized  by  this  section  as  a  legal  invest-  Bonds  authorized  by 

•'  .  1  r    ^'^'^'  *^  investment — 

ment  for  savings  banks  may  be  carried  on  the  books  of  how  carried  on  books 

^  "^  1  1      •  °^  bank,  etc. 

said  bank  at  their  investment  value,  based  on  their  mar- 
ket value  at  the  time  they  were  originally  bought,  unless 
the  superintendent  of  banks  shall  require  any  or  all  of 
the  bonds  which  may  thereafter  have  a  market  value  less 
than  the  original  investment  value  to  be  written  down  to 
such  new  market  value  which  shall  be  done  gradually  if 
practicable  and  in  such  manner  as  he  may  determine;  or 
he  may,  by  a  plan  of  amortization  to  be  determined  by 
him,  require  such  gradual  extinction  of  premium  as  will 
bring  such  bonds  to  par  at  maturity. 

When  it  shall  be  necessary  to  prevent  loss  to  any  sav-  Bonds  of  intrastate 

,R.  R.  corp'n  not 

ings  bank  on  an  obligation  owned  or  on  a  debt  previously  conforming  to  see— 

^  ,  .11  •  ••      ■^vhen  purchasable. 

contracted  in  good  faith,  it  may,  with  the  previous  writ- 
ten consent  of  the  superintendent  of  banks,  purchase  or 
acquire  bonds  of  any  railroad  corporation  incorporated 
under  the  laws  of  the  state  of  California  and  operated 
exclusively  therein,  notwithstamding  such  bonds  do  not 

[931 


§  61        BLYTH.  WITTER  &  CO. 

BONDS  WHICH  AKE  conf orm  to  the  requirements  in  this  section  contained ; 
MENTs— Continued,  provided,  any  bonds  so  purchased  or  acquired  must  be 
sold  for  the  best  price  obtainable  by  any  bank  within  five 
years  after  such  purchase  or  acquisition. 

Classes  of  bonds  is-  m.  •  i         i  i      ii     i  r.  i  l 

sued  by  "public  No  savings  bank  shall  hereafter  purchase  or  loan 
savings  bank^may  moncy  upon  any  bond,  note  or  other  evidence  of  indebt- 
invest,  etc.  gjj^ggg^  issued  by  any  "public  utility,"  subject  to  the  jur- 
isdiction, regulation  or  control  of  the  railroad  commission 
of  this  state  under  the  provisions  of  the  "public  utilities 
act,"  approved  December  23,  1911,  and  acts  amendatory 
thereof  or  supplemental  thereto,  unless  each  such  bond, 
note  or  other  evidence  of  indebtedness  was  either : 

(a)  Issued  prior  to  the  taking  effect  of  the  "public 
utilities  act";  or, 

(b)  Issued  under  authority  of  the  railroad  commission, 
in  accordance  with  the  provisions  of  said  act;  or, 

(c)  A  note  issued  for  a  period  not  exceeding  twelve 
months,  in  accordance  with  the  provisions  of  subdivision 
(b)  of  section  fifty-two  of  said  act. 

[Publishers'  note,  re  Section  61,  as  amended  1921: 

This  section  has  been  materially  reshaped  and  revised.  Any 
savings  bank  may  purchase,  hold  or  sell  real  or  personal  property 
as  follows: 

1,  2  and  3  as  heretofore; 

4.  Gold  or  silver  bullion  and  United  States  mint  certificates 
of  ascertained  value; 

5.  (a),  (b),  (c)  and  (d).  Bonds  or  interest-bearing  notes  or 
obligations  of  the  United  States,  of  the  State  of  California,  of  any 
county,  city  and  county,  city  or  school  district  of  this  State;  bonds 
or  stocks  or  notes  of  any  State  in  the  United  States  other  than  Cali- 
fornia, or  those  of  any  county,  city  and  county,  city  or  town  or 
school  district  of  any  State  other  than  California,  having  a  popula- 
tion of  more  than  20,000  inhabitants;  provided  the  entire  bonded 
indebtedness  thereof  does  not  exceed  fifteen  per  centum  of  the 
value  of  the  taxable  property  therein,  and  that  payment  of  any  partp  ^ 
of  principal  or  interest  has  not  been  defaulted  within  five  years 
next  preceding  such  investment,  and  bonds  of  any  district  organ- 
ized under  the  laws  of  California  which  are  investigated  and  ap- 
proved by  an  authorized  commission,  by  authority  of  which  ap- 
proval the  bonds  are  declared  to  be  legal  investments  for  savings 
banks. 

The  purchase  of  bonds  of  the  foregoing  kinds  m.ay  be  made 
without  consent  of  the  superintendent. 

[94] 


SAVINGS  BANKS  §  6! 

6.  (a),  (b),  (c),  (d),  (e),  (f),  (g),  (h)  and  (i)  cover  bonds  BONDS  T^^<m  ARE 

and  securities  which   may   be  purchased   after  certification   by  the  jj£jjj.g continued 

superintendent,  following  an  investigation  as  provided  under  Sec- 
tion 61a. 

(a)  Bonds  of  any  foreign  country. 

(b)  Bonds  of  an  irrigation  district  outside  of  California,  which 
are  investigated  and  approved  by  a  duly  authorized  commission 
of  the  State  in  which  the  district  is  located,  and  by  authority  of 
which  approval  the  bonds  are  available  for  investment  by  savings 
banks  in  said  State,  with  specified  debt  limitation; 

(c)  Bonds  of  any  district  organized  under  the  laws  of  Califor- 
nia not  otherwise  provided  for  in  this  section. 

(d)  Railroad  bonds. 

(e)  Other  public  utility  bonds. 

Bonds  issued  by  a  railroad  or  other  public  utility  corporation 
must  be  secured  by  mortgage  or  deed  of  trust  conforming  to  the 
present  requirements,  except  that  under  IV — an  underlying  or 
divisional  closed  mortgage  or  deed  of  trust — the  proviso  conclud- 
ing the  old  section  is  omitted. 

(f)  Notes  or  bonds  secured  by  first  mortgage  or  deed  of  trust, 
or  other  first  lien  upon  real  estate.  The  same  as  the  previous 
(h)  with  this  addition:  "That  in  case  the  real  estate  is  located 
outside  of  this  State,  the  provisions  of  this  paragraph  shall  be  sub- 
ject to  the  limitations  and  modifications  contained  in  Section  57a." 

A  bank  may,  without  such  certification  by  the  superintendent, 
purchase  any  note  or  bond  issue,  provided  for  in  paragraph  (f), 
whenever  such  purchase  constitutes  the  entire  amount  of  notes  or 
bonds  secured  by  the  same  real  estate. 

(g)  Collateral  trust  bonds  or  notes  when  secured  as  at  pres- 
ent provided  under  (i)  1  and  2,  except  that  the  deposit  may  be  of 
notes  or  bonds  instead  of  bonds  alone  as  at  present. 

(h)  Railroad  equipment  trust  certificates,  or  obligations  issued 
or  guaranteed  by  a  corporation  to  which  a  loan  for  the  construc- 
tion, acquisition,  purchase  or  lease  of  railroad  equipment  has  been 
made,  with  the  approval  of  the  Interstate  Commerce  Commission. 
The  entire  issue  shall  not  exceed  sixty  per  cent,  of  the  cost  of  the 
equipment  and  shall  mature  serially  not  later  than  fifteen  years 
from  the  date  of  issue.  The  certificates  or  obligations  must  be 
secured  by  or  be  evidence  of  a  prior  lien  upon  or  reservation  of 
title  to  such  equipment,  or  by  an  assignment  of  or  prior  interest  in 
the  rent  or  purchase  notes  given  for  the  hiring  or  purchasing  of 
the  equipment. 

(i)  Acceptances  issued  by  a  discount  acceptance  or  invest- 
ment corporation  formed  under  the  Edge  Act  or  the  Investment 
Companies  Act  of  New  York  or  by  an  identical  corporation.  The 
legality  of  previously  and  lawfully  made  investments  is  not  af- 
fected, nor  do  the  amendments  require  the  changing  of  investments 
lawfully  made. 

The  provision  regulating  the  method  of  carrying  investments 
on  the  books  of  a  bank,  and  for  the  purchase  of  the  bonds  of  a 
California  railroad  corporation  to  prevent  loss,  and  the  provision 

[95] 


§61a  BLYTH,  WITTER  &  CO. 

BONDS  WHICH  ARE   regarding   the  purchase  or  loaning   of  money   upon  public   utility 
M^'^^r^^t^^^d     ''°"^''  note*  an<l  evidences   of  indebtedness  remain  unchanged. 

on  inue  .  Provisions,    formerly    appearing    in    this   section,    relieving    the 

State  from  liability  to  pay  or  to  guarantee  the  validity  of  any 
stocks,  bonds,  etc.,  and  prohibiting  advertising  that  securities  con- 
form to  the  law,  etc.,  have  been  transferred  to  Section  61a.] 

Section  61a.  The  superintendent  of  banks  shall  have 
power,  when  any  issue  of  bonds  or  securities  is  presented 
to  him  for  that  purpose,  to  investigate  and  ascertain 
whether  such  bonds  or  securities  come  within  and  fully 
conform  to  all  the  requirements  of  paragraphs  (d),  (e), 
(f)  or  (g)  of  subdivision  six  of  section  sixty-one  of 
this  act,  or  of  either  of  said  paragraphs.  He  may  also 
supt.  may  investigate  investigate  and  ascertain  for  what  period  of  time,  and 
and  ascertain  if  they  upou  what  Conditions,  any  frsuichise  granted  to  or  held 

conform  to  Sec.  61.  .  ...  iii  >. 

by  any  corporation  issumg  any  such  bonds  or  securities 

will  remain  in  force,  and  any  other  facts  or  conditions 

bearing  upon  the  value  or  sufficiency  of  such  bonds.    The 

On  questions  concern-  Superintendent  of  banks  may  accept  and  act  upon  the 

ing  securities,  Supt.  ....  -  , 

may  act  on  legal  opinions  and  appraiscmcnts  of  any  attorneys,  engineers, 

opinions  and  ap-  ,  I'l 

praisements  present-  or  appraisers  which  may  be  presented  by  such  person  or 

ed  by  applicant.  . 

corporation,  so  applying,  and  the  reports  of  any  of  the 
executive  officers  of  the  corporation  issuing  such  bonds 
or  securities,  on  any  question  of  fact  concerning  or  affect- 
ing such  bonds  or  securities,  the  security  thereof,  the  fran- 
chise conditions  herein  mentioned,  or  the  financial  condi- 
tion of  the  corporation  issuing  the  same.  In  lieu  of  or  in 
addition  to  such  opinions,  appraisements  and  reports,  the 
Supt.  may  select  at-  Superintendent  of  banks  may,  if  he  deems  proper,  have 

torneys,  appraisers  ii  i  i  i  ><<      i  i  . 

and  accountants,  at  any  or  all  such  matters  passed  upon  and  certified  to  him 

expense  of  applicant.   ,  .  ,  *•   i  « 

by  attorneys,  engineers,  appraisers  or  accountants  of  his 

own  selection  at  the  expense  of  the  applicant.     If  the 

If  Supt.  finds  bonds  superintendent  of  banks  shall  find  from  such  investiga- 

or  securities  conform      .iiii  ••  i  .i* 

to  Sec.  61,  he  shall  tion  that  the  bonds  or  securities  so  presented  come  within 

so  certify;  otherwise  ten  e  iii  •  e  e         »  t 

certificate  refused,  and  fuliy  conform  to  all  the  requirements  of  any  of  said 
paragraphs  of  subdivision  six  of  section  sixty-one  of  this 
act,  and  is  satisfied  from  such  investigation  as  to  such 
franchise  conditions,  he  shall  so  certify  unless  for  any 
reason  he  shall  be  of  the  opinion  that  such  bonds  are  not 

[96] 


SAVINGS  BANKS  §  6 Is 


a  safe  or  proper  investment  for  savings  banks,  and  in  ^°^^^  invest -*^^ 
such  event  or  if  such  bonds  shall  fail  to  meet  the  require-  ments— continued. 
ments  of  this  act  such  certificate  must  be  refused.     The  ^.    ^ 

Supt.  may  investigate 

Superintendent  of  Banks  also  shall  have  power  to  inves-  and  certify  as  to 

•^  ^  _  ,  sufficiency  of  bonds 

tififate  and  ascertain  the  status  and  sufficiency  as  mvest-  specified  in  pars,  (a), 

ments  for  savmgs  banks  of  any  bonds  or  notes  or  obliga-  of  sub.  six,  sec.  ei. 

tions  specified  in  paragraphs  (a),  (b),  (c),  (h)  and  (i) 

of  subdivision  six  of  section  sixty-one  of  this  act.     If  upon 

such  investigation  it  shall  be  determined  in  the  opinion  of 

the  superintendent  of  banks  that  any  bonds  or  notes  or 

obligations  specified  in  paragraphs    (a),    (b),    (c),    (h) 

and  (i)  of  subdivision  six  of  section  sixty-one  of  this  act 

constitute  a  proper  investment  for  savings  beuiks  he  shall 

so  certify. 

Any  certificate  issued  by  the  superintendent  of  banks  ^"p*'^'"*^  revoke 
under  authority  of  the  provisions  of  this  section  may  be 
revoked  at  any  time  in  his  discretion.  Any  certificate 
issued  in  relation  to  notes  or  bonds  of  a  railroad  or  other 
public  utility  corporation  shall  expire  not  later  than  three  fg^^^lflf^^t""  °^ 
months  after  the  end  of  the  then  current  fiscal  year  of  the 
corporation  issuing  such  notes  or  bonds. 

Any  such  certificate  expiring  may  be  renewed  or  ex-  Expiring  certificate 
tended   by   the  superintendent   of  banks   without  appli-  '^^"^^^ 
cation  therefor  from  such  corporation  or  other  interested 
parties  if  he  shall  be  satisfied  that  the  notes  or  bonds  re- 
ferred to  in  said  certificate  are  in  conformity  with  the 
then  requirements  of  section  sixty-one  of  this  act. 

The  actual  expense  of  investigating  any  issue  of  bonds  Expense  of  investi- 

1       1      11     1  •  J    l_        ..L  gating  issues,  by 

or  securities  so  presented  shall  be  paid  by  the  person,  whom  paid. 
district  or  corporation  presenting  the  same  for  investiga- 
tion,  and   the   superintendent   of  banks,   before   making 
such  investigation,  may  require  a  cash  deposit  of  such 
amount  as  he  may  deem  necessary  to  cover  such  expense,  ofaciai  Ust  of 

__  rt-'ii'r   securities. 

The  superintendent  of  banks  shall  keep  an  official  list  of 
all  bonds  and  securities  certified  by  him. 

state  not  to  be  liable 

No  provision  of  this  act,  and  no  act  or  deed,  done  or  for  payment  of.  or  to 

•^  '  ^  guarantee  regularity 

performed  under  or  in  connection  therewith,  and  no  find-  of  securities  certified 

*^  by  Supt. 

[97] 


§  6Ia-62  BLYTH,  WITTER  &  CO. 


BONDS  WHICH  ARE  uig  made  or  certificate  issued  under  any  provkion  thereof, 
HENTs^onSd:  shall  be  held  or  construed  to  obligate  the  State  of  Califor- 
nia  to  pay,  or  be  liable  for  the  payment  of,  or  to  gfuaran- 
tee  in  any  manner  whatsoever,  the  regularity  or  the  veJid- 
ity  of  the  issuance  of  emy  stock  or  bond  certificate,  or 
bond,  note,  or  other  evidence  of  indebtedness  certified 
under  any  provbion  of  this  act,  by  the  superintendent  of 
banks. 


Advertising  bonds  as  It  shall  not  be  lawfuI  for  any  individual,  firm,  associa- 
laviUrbank— when  tion,  bank,  trust  company,  stock  compemy,  copartnership 
unlawful.  ^^  corporation  to  advertise  by  newspaper  or  circular  or  in 
any  other  manner  that  any  securities  are  legal  investments 
for  savings  bemks  in  this  state  unless  such  securities  are  at 
the  time  of  said  advertisement  legzJ  investments  for  sav- 
ings banks  in  this  state,  or  to  use  any  advertisement  which 
might  lead  the  public  to  believe  that  any  securities  con- 
form to  the  requirements  of  law  relating  to  investments  by 
savings  banks  unless  such  advertisement  shjdl  have  been 
approved  in  writing  by  the  superintendent  of  banks  prior 
to  publishing,  circulating  or  otherwise  issuing  the  same. 
Any  individual,  firm,  zissociation,  bank,  trust  company, 
stock  company,  copartnership  or  corporation  who  shall 
advertise  any  securities  in  violation  of  the  provisions  of 
this  paragraph  shzJl  be  guilty  of  a  misdemeanor  and  shall 
Penalty,  be  punishable  by  a  fine  not  exceeding  one  thousand  dol- 
lars or  by  imprbonment  in  a  county  jail  not  exceeding 
one  year  or  by  both  such  fine  and  imprbonment. 

[Publishers'  note,  re  Section  61a,  as  amended  1921: 
No  changes  are  made  in  the  language  of  the  section  as  it  stood 
prior  to  the  amendment,  except  the  changes  of  the  letters  and 
numbers  referring  to  the  previous  section.  The  provisions  previ- 
ously appearing  in  Section  61  relieving  the  State  from  liability  to 
pay  or  to  guarantee  the  validity  of  any  stocks,  bonds,  etc.,  and 
prohibiting  advertising  that  securities  conform  to  the  law  relating 
to  investments  by  savings  banks,  unless  they  have  been  certified, 
have  been  transferred  to  Section  61a.] 

Dealing  in  real  or       Section  62.      No  savings  bank  shall,   directly  or  indi- 

an"contrictinrof  rectly,  deal  or  trade  in  real  or  personal  property  in  any 

^^^*"  other  case  or  for  any  other  purpose  than  is  authorized 

[98] 


SAVINGS  BANKS §  62 

by  this  act,  and  shall  not  contract  any  debt  or  liability  for 
any  purpose  whatever  other  than  for  deposits,  except  as 
in  this  section  provided. 

Savings  banks  may  pay  regular  depositors,   when  re-  Savings  banks  may 

°  .^     I-    .^  o  I-  Qjj  request  pay  de- 

quested  by  them,  by  draft  upon  deposits  to  their  credit  positors  by  draft, 

^  .*  »  i  ^jjj  charge  exchange 

with   their  banks,    and   charge  current  rate   of  exchange  therefor. 
for  such  drafts. 

No   savings  bank  shall   borrow  money,    or  pledge   or  savings  bank  not  to 
hypothecate  any  of  its  securities,  except  to  meet  the  im-  to  melt'demanda'oV 
mediate  demands  of  its  own  depositors,  and  then  only  in  depositors. 
pursuance  of  a  resolution  adopted  by  a  vote  of  a  majority 
of  its  board  of  directors,   duly  entered  upon  their  min- 
utes, wherein  shall  be  recorded  the  ayes  and  nays  upon 
each  vote;  also  with  the  written  approval  of  the  super- 
intendent of  banks,   and  he  shall  have  the  authority  to 
fix  the  amount  to  be  borrowed,   the  amount  and  char- 
acter  of  the  securities   to  be   pledged    or  hypothecated, 
and  the  term  and  rate  of  interest  thereon;  provided,  that 

,  ,  f  f  e  c  •  •        Savings  banks  may, 

any  savmgs  bank  may,  for  the  purpose  or  perrorming  its  to  extent  of  capital 

-  .  1  .  .         I         .  L        •         1     l.       ^""^  surplus  or  re- 

runctions  and  transacting  its  business  as  authorized  by  serve,  rediscount 
this  act,  rediscount,  with  or  without  guarantee  or  endorse-  Federal  Reserve 
ment,  with  the  federal  reserve  bank,  its  acceptances, 
notes  or  any  other  securities,  available  for  rediscount 
with  a  federal  reserve  bank,  in  any  amount  up  to  but  not 
exceeding  its  capital  and  surplus  or  reserve  without  con- 
sent of  the  superintendent  of  banks,  and  shall  not  be 
considered  as  borrowed  money  within  the  meaning  of 
this  section;  provided,   also,   that  savings  banks  may,   in 

,         .         ,    I         I  1         •  I  •  Savings  bank  may 

the  manner  authorized  by  law,  and  without  the  previous  borrow  and  receive  on 

deposit  public  moneys, 

approval    of   the   superintendent    of   banks,    borrow    the  federal  and  state  as 

specified. 

public  moneys  of  the  United  States,  the  State  of  Cali- 
fornia, the  counties,  cities  and  counties,  and  towns  of 
said  State  of  California  and  receive  such  public  moneys 
on  deposit;  provided,  also,  that  savings  banks  may,  in 
the  manner  authorized  by  law,  and  without  the  previous 
approval  of  the  superintendent  of  banks,  borrow  postal 
savings  moneys  of  the  United  States,   and  receive  such 

[991 


§  62-63  BLYTH,  WITTER  &  CO. 

postal   savings  moneys   on   deposit;  and   provided,   fur- 
ther, savings  bemks  may  borrow  any  amount,  in  addition 
May  borrow  any  ad-  to  the  amounts  authorized  to  be  borrowed  in  this  section, 
purchase  from  V.  s.  f or  the  purpose  of  buying  from  the  United  States,  United 

or  IT.  S.  bonds  and  oii11¥t»io  •/' 

other  federal  securi-  btates  Donds,  United  otates  treasury  certincates,  or  notes 

ties,  in  manner  ii«-^i« 

specified,  or  obugations  of  the  United  States,  but  only  in  pursu- 
ance of  a  resolution  of  a  majority  of  its  board  of  direc- 
tors, duly  entered  upon  their  minutes,  and  without  the 
previous  approval  of  the  superintendent  of  banks,  but 
the  fact  of  such  transaction  shall  forthwith  be  reported 
Excess  ioa°^*®  sav-  jjj  writing  to  the  Superintendent  of  banks.  No  excess 
loan  made  to  any  savings  bank  with  or  without  pledge 
of  assets  shall  be  invalid  or  illegal  as  to  the  lender. 

Section  63.  Savings  banks  may  issue  general  certifi- 
cates of  deposit,  which  are  transferable,  as  in  other  cases, 
by  indorsement  and  delivery;  may  issue,  when  requested 
by  the  depositor,  special  certificates,  acknowledging  the 
deposit  by  the  person  therein  named  of  a  specified  sum 

Savings  bank  may       r  i  i  .i.  ^irri 

issue  certificates  gen-  ot  money,  and  expressly  providmg  on  the  race  or  such 
deposits  on  conditions  Certificate  that  the  sum  so  deposited  and  therein  named 
may  be  transferred  only  on  the  books  of  the  bank;  pay- 
ment thereafter  made  by  the  bank  to  the  depositor  named 
in  such  certificate,  or  to  his  assignee  named  upon  the 
books  of  the  bank,  or  in  case  of  death,  to  the  legal  rep- 
resentative of  such  person,  of  the  sum  for  which  such 
special  certificate  was  issued,  shall  discharge  the  bank 
from  all  further  liability  on  account  of  the  money  so 
paid. 

^'^%'su*iubject  to  ^^^  *^"^®  certificates  of  deposit,  issued  by  a  savings 
oTh^rdepositsretc!  t>ank,  shall  be  subject  to  the  same  limitations  and  condi- 
tions as  applied  to  other  deposits,  and  notice  thereof 
shall  be  given  by  the  words  "Subject  to  conditions  of 
agreement  with  depositors"  printed  on  the  face  of  the 
certificate  issued. 

[1001 


SAVINGS  BANKS  §  64-65 

Section  64.      Each  savings  bank  must  prescribe  by  its  Sayings  bank  to  pre- 

1  ^  scribe  by  its  by-laws 

by-laws,  or  by  contract  with  its  depositors,  the  time  and  °^  py  contract,  time 

•'  and  conditions  of  re- 

conditions  on  which  repayment  is  to  be  made  to  deposi-  payment  to  depositor. 
tors,  except  as  in  this  act  otherwise  provided.  In  all 
cases  the  by-laws  or  contracts  shall  provide  that  notice 
of  at  least  thirty  days  may,  at  the  option  of  any  such 
bank,  be  required  to  be  given  of  intention  to  withdraw 
any  deposit  or  part  thereof,  but  whenever  there  is  any 
call  by  depositors  for  repayment  of  a  greater  amount  than 
the  bank  may  have  disposable  for  that  purpose,  the 
directors  or  officers  thereof  must  not  make  any  new  loan 
or  investment  of  the  funds  of  the  depositors  or  of  earn- 
ings thereof  until  such  excess  of  call  has  ceased.  The 
directors  of  any  such  bank  having  no  capital  stock  shall, 
before  the  declaration  of  any  dividend,  carry  at  least 
one-tenth  part  of  the  net  profits  of  such  bank,    for  the  Savings  bank  without 

capital  stock  shall 

preceding  half  year,   or  for  the  period  covered  by  said  ^^^ry  at  least  one- 

j.-ii  .  c         1         c    1    •  1  tenth  profits  to 

dividend,  to  its  reserve  fund.  Subject  to  the  provisions  reserve. 
of  section  nineteen  of  this  act,  any  losses  sustained  by 
any  such  bank  may  be  charged  to  and  paid  out  of  its 
reserve  fund.  A  larger  reserve  fund  may  be  created  and 
nothing  herein  contained  shall  be  construed  as  prohibi- 
tory thereof.  The  assets  of  any  such  bank  are  a  security 
to  its  depositors.  Any  such  bank  organized  without  cap- 
ital stock,  may  provide  by  its  by-laws  for  the  disposal  of 
any  amount  in  its  reserve  fund  in  excess  of  the  amount 
required  by  section  nineteen  of  this  act  and  may  also 
provide  for  final  disposal  upon  the  dissolution  of  the 
bank  of  its  reserve  fund  or  the  balance  thereof  remain- 
ing after  payment  of  any  losses  of  such  bank. 

Section  65.      No  loan  shall  be  made,  for  himself  or  as  savings  bank  shaU 
agent  or  partner  of  another,  directly  or  indirectly,  to  any  rector  or  officer,  or 

d.  /Y-  r  -111  111  upon  his  endorse- 

irector  or  othcer  or  any  savings  bank  by  such  bank,  or  ment,  etc.,  except 

.1  1  .  .  .  f  I         rr      loan  may  be  made 

on  the  endorsement,  surety  or  guaranty  or  any  such  ofn-  to  corporation  in 
cer  or  director,   except  that  loans  may  be  made  to  any  ^cer  holds  minority 
corporation  in  which  any  director  or  officer  of  such  sav-  ^  "'^  ' 
ings  bank  may  own  or  hold  a  minority  number  of  shares 

[101] 


§  65  BLYTH.  WITTER  &  CO. 


of  stock,  upon  authorization  of  or  confirmation  within 
thirty  days  after  making  such  loan,  by  a  majority  of  all  the 
directors  of  such  bank  and  the  affirmative  vote  of  all  direc- 
tors of  such  bank  present  at  the  meeting  authorizing  or 
Interested  director  confirming  such  loan;  provided,  however,  that  such  loan 

not  to  act  on  such  _  ^  '^ 

loan,  shall  in  all  other  respects  conform  to  and  comply  with  all 
other  provisions  of  this  act.  Such  interested  director  or  of- 
^°*bank  tcTan^the"*  ficer  shall  not  vote  or  participate  in  any  manner  in  the  ac- 
tion of  the  board  on  such  loan;  provided,  also  that  by  and 
w^ith  the  consent  of  the  superintendent  of  banks  previ- 
ously obtained  in  writing,  all  directors  may  vote  upon 
such  a  loan  made  by  one  bank  to  another  bank  where  the 
entire  capital  stock  of  one  is  owned  by  or  held  in  trust  for 
the  stockholders  of  the  other  bank  and  where  all  or  a  ma- 
jority of  the  board  of  directors  of  each  of  said  banks  is 
composed  of  the  same  persons.  Such  authorization  or  con- 
Facts  concerning  firmation  shall  be  entered  upon  the  records  or  minutes  of 

such  loan  to  be  re-  •  •  i  i  'T'i         r  r  i   •  11  1 

ported  to  Supt.  such  savmgs  bank.  1  he  ract  or  making  such  loan,  the 
names  of  the  directors  authorizing  or  confirming  such 
loan,  the  corporate  name  of  the  borrower,  the  name  of 
each  director  or  officer  of  such  bank  who  is  a  member, 
stockholder,  officer  or  director  of  the  corporation,  to 
which  such  loan  is  made,  the  amount  of  stock  held  by  him 
in  such  borrowing  corporations,  the  amount  of  such  loan, 
the  rate  of  interest  thereon,  the  time  w^hen  the  loan  will 
become  due,  the  amount,  character  and  value  of  security 
given  therefor  and  the  fact  of  final  payment,  when  made, 
shall  be  forthwith  reported  in  writing  by  the  cashier  or 
secretary  of  such  savings  bank  to  the  superintendent  of 
banks;  provided,  that  any  loan  made  to  any  corporation 
of  which  any  director,  officer,  agent  or  employee  of  such 
savings  bank  owns  not  more  than  five  per  cent  of  the 
paid-in  capital  of  such  borrowing  corporation  nor  any 
loan  made  to  any  corporation  of  which  any  two  or  more 

Iioans  to  corporations     •,.  zt*  .  i  c  T_  • 

where  stock  owned,  directors,   ofhcers,   agents  or  employees  or  such  savmgs 

etc.,  by  directors,  ,  ,  ,  ^       c     L  •  l    • 

officers,  agents,  or  bank  own  not  more  than  twenty  per  cent  or  the  paid-m 

employees — when  not  •      i         r  i      i  •  •  ill  l 

to  be  reported,  capital  of  such   borrowmg  corporation,   shall  not  be  re- 

[1021 


SAVINGS  BANKS  §  65 


ported  to  the  superintendent  of  banks.      No  loan  may  be 
made  to  any  corporation  a  majority  of  the  stock  of  which 
is  owned  or  controlled  by  any  one  or  more  of  the  direc- 
tors or  officers,   or  officers  and  directors,  of  such  savings  supt°to°?oan  re 
bank  collectively,  except  with  the  previous  consent  of  the  i"'""^- 
superintendent  of  banks. 

A  loan  may  be  made  to  any  agent  or  employee,  other  savings  bank  may 

,  — .  ,.  r  -111  L    loan  to  agent  or 

than  an  officer  or  director,  of  any  savmgs  bank  by  such  employee. 

bank  upon  authorization  or  confirmation  of  a  majority  of 

all  the  directors  of  such  savings  bank  and  an  affirmative 

vote  of  all  directors  of  such  savings  bank  present  at  the 

meeting  authorizing  or  confirming  such  loan;   provided, 

however,  that  such  loan  shall  in  all  respects  conform  to 

and  comply  with  all  other  provisions  of  this  act.      Such 

authorization  or  confirmation  shall  be  entered  upon  the 

records  or  minutes  of  such  savings  bank.      The  fact  of  Facts  concerning 

...  such  loan  to  be  re- 

making such  loan,  the  names  of  the  directors  authorizmg  ported  to  supt. 

such  loan,  the  name  of  the  borrower,  the  nature  of  his  em- 
ployment, the  amount  of  such  loan,  the  rate  of  interest 
thereon,  the  time  when  the  loan  will  become  due,  the 
amount,  character  and  value  of  the  security  given  there- 
for, and  the  fact  of  final  payment,  when  made,  shall  be 
forthwith  reported  in  writing  by  the  cashier  or  secretary  ^^^^^^  ,„  ^^^^^^tions 
of  such  savings  bank  to  the  superintendent  of  banks;  pro-  v^here  stock  owned, 

°  •  r        1   •    1_    ®      '  ^  directors  or 

vided,  that  any  loan  made  to  any  corporation  of  which  officers,  agents  or 

•^  r  1  •  employees — when  not 

any  director,  officer,  agent  or  employee  of  such  savings  to  be  reported. 
bank  owns  not  more  than   five  per  cent  of  the  paid-in 
capital  of  such  borrowing  corporation  nor  any  loan  made 
to  any  corporation  of  which  any  two  or  more  directors, 
officers,   agents  or  employees  of  such  savings  bank  own 
not  more  than  twenty  per  cent  of  the  paid-in  capital  of 
such  borrowing  corporation,  shall  not  be  reported  to  the 
superintendent  of  banks.     Any  officer  or  director  of  any  ^^"''^  "^ 
savings  bank  who  knowingly  procures  a  loan  from  such 
savings   bank   contrary  to   the   provisions  of   this  section 
shall  be  guilty  of  a  felony.     In  case  of  the  neglect  or  fail-  Penalties. 
ure  of  the  secretary  or  cashier  of  any  such  bank  to  report 

[103] 


§  65  BLYTH,  WITTER  &  CO. 

to  the  superintendent  of  banks,  as  herein  provided,  any 
of  the  facts  so  required  to  be  reported,  or  in  case  of  the 
neglect  or  failure  of  the  secretary  or  cashier  of  any  such 
bank  to  report  to  the  superintendent  of  banks  any  loan 
made  contrary  to  the  provisions  of  this  section,  the  bank 
shall  be  liable  therefor  and  shall  forfeit  to  the  people  of 
the  State  of  California  twenty-five  dollars  per  day  for  each 
day,  or  part  thereof,  during  which  such  neglect  or  failure 
continues. 

Loans  to  banks  and       This  section  shall  not  apply  to  any  loan  made  to  a 

religious  corpora-         i.>  .•  ii  .1  il- 

tjons.  religious  corporation,  club,  or  other  membership  corpor- 
ation of  w^hich  one  or  more  directors,  officers,  agents  or 
employees  of  such  savings  bank  may  be  members  or 
officers,  but  in  which  they  have  no  financial  interest. 

Loans  permitted  to       Loans  may  be  made  to  any  director,   other  than  an 

director  other  than       /-r  !•  1  •      i-  1  ^ 

officer,  or  to  agent  ofticer,  directly  or  indirectly,  or  to  any  agent  or  employee 
savings  bank,  on  of  a  savings  bank  on  the  security  of  United  States  bonds, 

security  of  U.  S.   y  r     .         ,      /->  ./-  .     ^  .    1 

bonds  or  other  United  otates  treasury  certihcates,  or  interest-bearing 
as  specified,  notes,  or  obligations  of  the  United  States,  or  those  for 
which  the  faith  and  credit  of  the  United  States  are 
pledged  for  repayment  of  principal  or  interest,  or  those 
issued  under  authority  of  the  United  States,  notwithstand- 
ing anything  in  this  section  contained,  and  such  loans 
may  be  made  in  the  usual  manner  of  making  loans  in 
which  no  director  of  such  bank  is  interested. 

[Publishers'  note,  re  Section  65,  as  amended  1921: 
The  following  are  the  amendments: 

1.  Loans  may  be  made  by  a  savings  bank  to  any  corporation 
in  which  any  director  or  officer  thereof  may  own  or  hold  a  minority 
number  of  shares,  upon  confirmation  within  thirty  days  after  mak- 
ing such  loan  by  a  majority  of  all  the  directors,  and  the  affirma- 
tive vote  of  all  directors  present  at  the  meeting  authorizing  or  con- 
firming such  loan. 

2.  A  loan  made  to  a  corporation,  of  which  any  director,  offi- 
cer, agent  or  employee  owns  not  more  than  five  per  cent  of  the 
paid-in  capital  of  the  borrowing  corporation,  and  a  loan  made  to 
any  corporation  of  which  any  two  or  more  directors,  officers, 
agents  or  employees  of  the  savings  bank  own  not  more  than  twenty 
per  cent,  of  the  paid-in  capital  of  the  borrowing  corporation,  shadl 
not  be  reported  to  the  superintendent.] 

no4i 


SAVINGS  BANKS  §  66-67 

Section  66.      No  savings  bank  shall  hereafter  make  any 
loans  to  any  person,   firm,   copartnership  or  corporation  Savines  banks  not 

,    io  make  loans  to 

to  an  amount  exceeding  fifty  per  centum   of  the  actual  any  person,  ^tc, 

.  ,  .      ,  ,  ,  ,  fill  -1         exceeding  SOf^t  paid- 

paid-up  capital  stock  and  surplus  or  such  bank,  or  in  the  up  capital  and 
case  of  a  bank  organized  without  capital  stock,  to  an 
amount  exceeding  fifty  per  centum  of  the  reserve  fund 
of  such  bank;  provided,  however,  that  any  savings  bank 
having  a  paid-up  capital  and  surplus  of  less  than  fifty  Exceptions  to 
thousand  dollars,  but  not  less  than  twenty-five  thousand 
dollars,  may  make  any  such  loan  on  real  estate  security 
to  an  amount  not  exceeding  twenty-five  thousand  dol- 
lars; and  provided,  further,  that  any  savings  bank  having 
a  paid-up  capital  and  surplus  of  less  than  twenty-five 
thousand  dollars  may  make  any  such  loan  on  real  estate 
security  to  an  amount  not  exceeding  its  paid-up  capital 
and  surplus,  if  each  such  loan  in  all  other  respects  con- 
forms to  the  provisions  of  this  act.      The  renewal  or  ex-  Renewal  or  extension 

of  loan — when  not 

tension  of  any  loan  heretofore  legally  made  by  any  sav-  'loan  hereafter 

made. 

ings  bank  shall  not  be  construed  to  be  a  "loan  hereafter 
made"  within  the  meaning  of  the  provisions  of  this  sec- 
tion. The  legality  of  investments  heretofore  lawfully 
made  pursuant  to  the  provisions  of  this  act  as  it  existed 
on  and  subsequent  to  July  1,  1909,  shall  not  be  affected 

by    the    provisions    of    this    section.      For    the    purposes    of   Endorser  deemed 

1   •  •  1  1      11    1  1  1  borrower. 

this  section  an  endorser  or  guarantor  shall  be  deemed  to 
be  a  borrow^er. 

Section  67.       1.      No  savings  bank  shall  loan  money  savings  bank  loans— 

T  ,  •.  r  1  1  1         their  security  and 

except  on  adequate  security  or  real  or  personal  property,  period. 

and  no  such  loan  shall  be  made  for  a  period  longer  than 

ten  years.      No  such  loan  shall  be  made  on  unsecured 

notes;   provided,   that  a  savings  bank  may  discount  or 

purchase  bankers'  acceptances  of  the  kind  and  character  savings  bank  may 

,  ..  i/<i  1  11*    'Iff  1*  I.   discount  or  purchase 

and  maturities  defined  and  made  eligible  ror  rediscount  bankers'  acceptances, 
with  a  federal  reserve  bank;   provided,   sJso,   that  such  count  with  Federal 
bankers'  acceptances  are  accepted  or  endorsed  without 
qualification  by  a  bank  or  trust  company,  which  bank  or 
trust  company  has  a  paid-in  capital  of  at  least  one  million 

1105] 


Form  and  contents 
of  such  statement: 


§  67  BLYTH.  WITTER  &  CO. 

dollars;  and  provided,  also,  that  a  savings  bank  may  dis- 
count or  purchaise  a  bill,  or  a  participating  interest  in  a 
tici^ating^interes^in  ^'^^*  evidenced  by  a  participation  certificate  bsued  by  a 
bui  evidenced  by  par-  gfj^jg  q,.  national  bank  in  this  state,  which  must  comply 

ticipation  cert. —  '  "^   "^ 

requirements.  y,i\}i  the  foUowing  requirements: 

Bill  issued  by       (a)    It  must  bc  a  bill  issued  by  a  solvent  individual  or 

solvent  individual, 

firm  or  corporation  firm  or  corporation  engaged  in  mercantile  or  manurac- 

in  mercantile  or  ^  ^  ^ 

mfg:.  business  in  turing  business  in  the  United  States  that  meikes  statements 

V.  S.,  making  state- 

ments  of  condition  ^f  jfj  condition  duly  ascertained  and  certified  to  by  a 

certified  by  public  "^  •/•      i 

accountant,  public  accountant.  Copy  of  such  a  certified  statement 
shall  be  on  file  in  the  office  of  the  savings  bank  discount- 
ing or  purchasing  such  bill  in  a  file  maintained  for  such 
purpose.  Said  statement  shall  have  been  issued  within 
the  preceding  fourteen  months  and  shall  be  the  latest 
bsued  by  said  individual  or  firm  or  corporation.  Said 
statement  shedl  consist  of  a  balance  sheet  showing  quick 
assets,  slow  assets,  permanent  or  fixed  assets,  current  lia- 
bilities and  accoimts,  short  term  loans,  long  term  loans, 
capital  and  surplus.  Accompzmying  said  balance  sheet 
shall  be  a  copy  of  a  statement  from  the  borrower  or  pub- 
lic accountant  concerning  the  following: 

( 1 )  The  nature  of  the  business. 

(2)  All  contingent  liabilities  such  as  endorsements  or 
guarantees. 

(3)  Particulars  respecting  any  mortgage  debts  and 
whether  there  is  any  lien  on  current  assets. 

(4)  The  meoamum  and  minimum  liabilities  of  the  in- 
dividual, firm  or  corporation  during  the  twelve  months 
previous  to  the  date  of  audit. 

Bill  must  be  issued       (Jj)    Ij  must  be  issued  by  an  individual,  firm  or  cor- 

by  individual,  firm  ^  •  i  i  •  i 

or  corporation  meet-  poration  whose  net  worth  is  not  less  than  two  times  the 

ing  specified  require-  ,  i'i»i«»  'ij* 

ments  as  to  assets  amount  of  its  Outstanding  liabilities,  includmg  any  con- 
tingent liabilities  arising  from  the  rediscount  of  bills  re- 
ceivable or  other  accommodation  endorsements,  nor  less 

[1061 


SAVINGS  BANKS §_67 

than  three  hundred  thousand  doUzu-s.  The  quick  assets 
of  said  individual,  firm  or  corporation,  consisting  of  mer- 
chandise, finished,  raw,  and  in  the  process  of  manufacture, 
accounts  receivable,  bills  receivable,  bonds  or  obligations 
of  the  government  of  the  United  States  at  the  then  market 
value  of  said  bonds  or  obligations  and  cash,  shall  not  be 
less  than  two  times  its  outstsmding  quick  liabilities  includ- 
ing any  contingent  liabilities  arising  from  the  rediscount 
of  bills  receivable  or  other  accommodation  endorsements, 
as  shown  by  said  statement. 


(c)    It   must  have   a   maturity  of  not  more   than  six  Eiii  to  have 

maturity  of  not 
months.  more  than  6  months. 


(d)    It  must  have  arisen  out  of  actual  commercial  trans-  siii  must  have  arisen 

.  ,  .,  1*111*11.1-  *  J  J  °"*  °^  actual  com- 

actions ;  that  is,  be  a  bill  whicii  lias  been  issued  or  drawn  meroiai  transactions, 


etc. 


for  industrial  or  commercial  purposes  or  the  proceeds  of 
which  have  been  or  are  to  be  used  for  such  purposes. 

No  bill  sheJl  be  eligible  for  discount  or  purchase  by  a  Biiisnot  eiigiVe: 
savings  bank,  the  proceeds  of  which  have  been  used  or 
are  to  be  used  for  suiy  of  the  following  purposes : 

(1)  For  investments  of  a  merely  speculative  character  (d  For  speculative 

,  Investments,  etc. 

whether  made  in  goods  or  otherwise. 

(2)  Must  not  have  been  issued  for  carrying  or  trading  (2)  For  deaiir?  in 

,   ,  stocks,  bonds  or 

in  stocks,   bonds  or  other  investment  securities,   except  other  investment 

.  J  securities,  except 

bonds  of  the  government  of  the  United  States,  and  must  u.  s.  bonds;  must 

,  not  cover  merely 

not  cover  merely  investments.  investments. 

( 3 )  Must  not  be  a  bill  of  any  individual,  firm  or  cor-  (3)  Must  net  be  bin 

,  e    °^  individual,  etc., 

poration  which  has  under  pledge  or  hypothecation  any  of  having  under  pied&e 

personal  assets, 

its  personal  assets. 

The  word  "biO,"  when  used  in  this  section,  shall  be   "bui"  dean8<j, 
construed  to  include  notes,  drafts,  or  bills  of  exchange, 
and   the   word    "goods"    shall   be   construed   to   include 
goods,  wares  or  merchandise. 

[107] 


§  67  BLYTH.  WITTER  &   CO. 

^h'avf  fii^e%"howinr       ^^^  savuigs  bank  purchasing  or  discounting  such  paper 
''"^dLcounTpaper?  ^^^^  ^^^^  "*  *  ^^^  maintained  for  the  purpose,  letters 
from  banks  and  merchants  or  mercantile  reports  bearing 
upon  the  credit  smd  standing  of  the  person,  firm,  copart- 
nership or  corporation  whose  paper  is  under  discount. 

Limitations  upon       No  savings  bsuik  shall  at  any  time  acquire  or  hold,  di- 

amounts  of  bills  .  •        .  . 

bank  may  hold,  rectly  or  indirectly,  by  discount  or  purchase,  any  such  bills 
of  any  one  person,  firm,  copeurtnership  or  corporation  in 
any  amount  which  shall  exceed  five  per  centum  of  the 
capital  and  surplus  or  reserve  of  such  savings  bemk,  nor 
shall  any  savings  bank  at  any  time  acquire  or  hold,  di- 
rectly or  indirectly,  by  discount  or  purchase,  an  amount 
of  bills,  of  the  character  defined  emd  limited  by  this  sec- 
tion, greater  than  twelve  and  one-half  per  centum  of  the 
deposits  of  such  bank. 

Limitations  upon       No  savings  bank  shedl  at  gmy  time  acquire  or  hold,  di- 

amounts  of  bankers  ^  -»  7 

acceptances  savings  rectly  or  indirectly,  by  discount  or  purchase,  any  such 

bank  may  acquire.  ^  r        ^  r-  j  j 

bemkers'  acceptances  from  any  one  acceptor  in  any 
amount  equal  at  any  time  in  the  aggregate  to  more  than 
ten  per  centum  of  its  paid-up  capiteJ  and  surplus  or  re- 
serve, unless  the  said  acceptemce  is  secured  either  by  at- 
tached documents  or  by  some  other  actual  security  grow- 
ing out  of  the  same  tremsaction  as  the  acceptance;  provi- 
ded, however,  that  euiy  savings  bemk  may,  irrespective  of 
euiy  such  security,  acquire  and  hold  acceptemces  equal  to 
twenty-five  per  centum  of  its  capital  and  surplus  or  re- 
serve, of  any  one  acceptor  having  a  paid-in  capital  of  not 
less  than  three  million  dolleu's. 

^'Tomb^ed  tTa^  No  savings  bank  shaU  at  any  time  acquire  or  hold,  di- 
ac^e"?a"n=ef  and  Mis.  ^ectiy  or  indirecUy,  by  discount  or  purchase,  a  combined 
total  amount  of  bankers'  acceptemces  auid  bills  of  the  char- 
acter defined  and  limited  by  this  section,  greater  than 
twenty  per  centum  of  the  deposits  of  such  bank;  provided, 
however,  that  any  savings  bank  may  acquire  and  hold 
bankers'  acceptemces  in  the  amount  of  two  thousand  five 
hundred  dollars. 

[108] 


SAVINGS  BANKS §67 

2.  No  savinffs  bank  shall   invest  or   loan   an   amount  Limitations  upon 

atf.     »,w     «»»  -,  amounts  bank  may 

greater  than  fifty  per  centum  of  its  actual  paid-up  capital  i,"^d*^ig°uiro"r °»ecu- 
and  surplus  in  or  on  any  one  note  or  bond  issue  of  the  "^jties  of  specified 

Kumu    ^       f,  J  classes;  exceptions. 

class  specified  in  parsigraph  (f)  of  subdivision  six  of  sec- 
tion sixty-one  of  this  act,  or  in  or  on  mortgage  participa- 
tion certificates  issued  by  a  mortgage  insurance  compzuiy 
pursuant  to  the  provisions  of  chapter  eight  of  title  two  of 
part  four  of  division  first  of  the  Civil  Code,  nor  more  than 
five  per  centum  of  its  assets  in  or  on  any  one  issue  of 
bonds  or  notes  or  obligations  of  euny  other  class,  except 
bonds  of  the  United  States,  or  interest-bearing  notes  or 
obligations  of  the  United  States,  or  bonds  of  the  State  of 
California,  bonds  for  which  the  faith  and  credit  of  the 
United  States  or  of  the  State  of  California  are  pledged, 
or  bonds  of  emy  county,  city  and  county,  city  or  school 
district  in  this  state,  or  bonds  of  emy  irrigation  district  in 
this  state  such  as  are  legal  for  investment  by  savings 
banks. 

3.  No  savings  bank  shall  loan  money:  savings  bank^ioaning 

money. 

(a)  On  bonds  of  the  character  specified  in  peuragraphs 

(a),  (b),  (c)  and  (d)  of  subdivision  five  of  section  sixty-  o^^.^^^l^iS^f^t 
one  of  this  act,  or  on  bonds  of  the  character  specified  in  ^^f^^^^^^pi" -^"^stc?  ei. 
paragraph  (c)  of  subdivision  six  of  section  sixty-one  of 
this  act,  unless  such  bonds  shsJl  have  a  market  value  at 
least  ten   per   centum   in   excess   of  the   amount   loaned 
thereon;  or, 

(b)  On  bonds  or  notes  or  obligations  of  the  character 
specified  in  paragraphs  (d),  (e),  (g),  (h)  and  (i)  of 
subdivision  six  of  section  sixty-one  of  this  act,  when  elig- 
ible as  investments  for  savings  banks  pursuant  to  said  sec- 
tions, unless  such  bonds  or  notes  shadl  have  a  market 
vedue  at  least  fifteen  per  centum  in  excess  of  the  amount 
loaned  thereon ;  or, 

(c)  On  bonds  or  equipment  trust  certificates  legal  for  °^„^-tt"ceSate. 
investment  by  savings  banks  in  the  states  of  New  York  |f ^|  ^y°.' irMalT.'"' 
or  Massachussets,  unless  such  bonds  or  equipment  trust 

[109] 


§  67  BLYTH,  WITTER  &  CO. 

certificates  shall  have  a  market  value  at  least  fifteen  per 
centum  in  excess  of  the  amount  loemed  thereon;  or, 

On  notes  or  bonds  or        (d)    On  notes  or  bonds  of  the  character  specified  in 

securities  specified  .... 

in  par.  (f )  subd.  six,  paragraph  (f)   of  subdivision  six  of  section  sixtv-one  of 

Sec.  61,  or  on  securi-     ,.,.  . 

ties  of  mortgage  this  act  when  Certified  as  leged  investments  for  savinsrs 

insurance  company   .,,,  ... 

issued  under  Civil  banks  luider  the  provisions  of  section  sixty-one  a  of  this 

Code.  ... 

act,  or  on  securities  issued  by  a  mortgage  insurance  com- 
pany pursuant  to  the  provisions  of  chapter  eight  of  title 
two  of  part  four  of  division  first  of  the  Civil  Code  eligible 
for  investment  by  savings  banks,  imless  such  bonds,  notes 
or  securities  shall  have  a  market  value  at  least  ten  per 
centum  in  excess  of  the  amount  loemed  thereon;  or, 
On  notes  or  bonds        (e)   On  notes  or  bonds  of  the  character  specified  in 

specified  in  pars,  (a)  i  /     \  i      /i    \         <•  i    i>     •   •  •  /• 

and  (b)  subd.  six,  paragraphs    (a)    and    (b)    or  subdivision  six  of  secbon 

Sec.  61.      .  /•     1  •  I  '/-111 

sixty-one  or  this  act  when  certified  as  legal  mvestments  for 
savings  banks  in  this  state,  unless  such  notes  or  bonds 
shall  have  a  market  value  at  least  fifteen  per  centum  in 
excess  of  the  amount  loaned  thereon;  or, 

(f)  On  personal  property  unless  such  personal  prop- 
erty shall  have  a  market  value  at  least  fifty  per  centum 
in  excess  of  the  aunount  loaned  thereon;  or. 

On  other  bonds  or  on        (g)    On  Other  bonds,  or  On  capital  stock  of  any  cor- 

capital  stock  of  cor-  *^  ' 

p-ration.  Restriction  poration,  unless  such  bouds  or  stock  shall  have  a  market 

on  loan  on  bank  stock.    "^  ' 

value  at  least  fifty  per  centum  in  excess  of  the  amount 
loemed  thereon;  provided,  however,  that  no  loan  shall 
be  made  upon  the  capital  stock  of  any  bank  unless  such 
bank  has  been  in  existence  at  least  two  years  and  has 
earned  and  paid  a  dividend  on  its  capitaJ  stock. 

Savings  banks  not  to        4.    No  savings  bank  shall  make  any  loan  on  security  of 

loan  on  real  estate,  ^  i  •      i  r  i'  i     • 

except  it  be  first  lien,  real  estate,   unlcss  it  be  a  first  hen,   and  in  no  event  to 

and  not  exceeding  .      .  r     i  i  i  r  i 

60%  of  market  excecd  Sixty  per  centum  of  the  market  value  or  any  real 

value.     Exception.  ,  .  ,  ,  r  r       -i' 

estate  taken  as  security  except  for  the  purpose  or  facilitat- 
ing the  sale  of  property  owned  by  such  savings  bank  or 
except  under  the  conditions  specified  in  section  fifty- 
seven  a  of  this  act;  provided,  that  a  second  lien  may  be 
accepted  to  secure  the  repayment  of  a  debt  previously  con- 

[1101 


On  personal  property. 


SAVINGS  BANKS  §  67 

tracted  in  good  faith;  and  provided,  also,  that  any  savings  casei  permitting  2nd 

,1,.,.  f.  iir  1  liens  and  loaci  not 

bank  holding  a  hrst  mortgage  or  deed  or  trust  on  real  es-  exceeding  90';  efface 

,  .  1    I       1   I  I  I  value  of  flnt  lien, 

tate  may  take  or  purchase  and  hold  or  loan  upon  another  roai  estate  mortgage, 

and  90",  of  60'/,  of 

and  immediately  subsequent  mortgage  or  deed   of   trust  market  value  of 

realty  permitted. 

thereon,  but  all  such  loans  shall  not  exceed  in  the  aggre- 
gate sixty  per  centum  of  the  market  value  of  the  real  es- 
tate securing  the  same;  provided,  further,  that  a  savings 
bank  may  loan  not  to  exceed  ninety  per  centum  of  the 
face  value  of  a  mortgage  which  constitutes  a  first  lien 
upon  real  estate,  but  in  no  event  shall  any  such  loan  ex- 
ceed ninety  per  centum  of  sixty  per  centum  of  the  market 
value  of  the  real  estate  covered  by  said  mortgage  or  deed 
of  trust. 

5.  No  savings  bank  shall  loan   to  any  one  borrower  capitai-stock  loans 

— restrictions  upon, 

on  the  security  of  the  capital  stock  of  any  corporation  an 
amount  exceeding  ten  per  centum  of  the  capital  stock 
and  surplus  of  such  savings  bank;  provided,  that  all  loans 
on  the  capital  stock  of  any  one  corporation  shall  not 
exceed  in  the  aggregate  twenty-five  per  centum  of  the 
capital  stock  and  surplus  of  such  savings  bank. 

6.  No  savings  bank  shall  purchase,  invest  or  loan  its  investment  of  any 

.  .  capital,  surplus  or 

capital,   surplus  or  the  money  of  its  depositors,    or  any  deposits  in  mining 

shares  forbidden. 

part  of  either,   in  mining  shares  or  stock  and  any  presi-  violation  hereof 

*^  °  felony. 

dent  or  managing  officer  who  knowingly  consents  to  a 
violation  of  any  provision  of  this  paragraph  shall  be  guilty 
of  a  felony. 

[Publishers'  note,  re  Section  67,  as  amended  1921: 
The  following  are  the  amendments  of  this  section: 
To  Section  67-1  is  added  the  proviso  that  a  savings  bank  may 

discount  or  purchase  a  participation  certificate  in  a  bill,  as  well  as 

purchase  a  bill,  as  before  the  amendment. 

In  1(d)  (3),  the  amount  of  bankers'  or  trade  acceptances, 
drafts  and  bills  of  exchange  which  a  savings  bank  may  acquire 
from  any  one  acceptor,  shall  not  exceed  at  any  time  in  the  aggre- 
gate more  than  ten  per  cent,  of  its  paid-up  capital  stock  and  sur- 
plus or  reserve,   unless  the  savings  bank  is  secured  either  by   at- 

[111] 


§  67-68 BLYTH.  WITTER  &  CO. 

tached  documents  or  by  some  other  actual  security  growing  out 
of  the  same  transaction  as  the  acceptance.  Note  proviso,  also  lim- 
itation on  combined  total  of  acceptances. 

In  67-2  the  only  changes  are  the  reference  numbers  to  corre- 
spond to  the  changes  in  Section  61. 

67-3  (a)  is  amended  to  conform  to  the  new  lettering  and  num- 
bering of  Section  61.  The  references  in  the  old  section  to  (a), 
(aa),  (b),  (c)  and  (d)  of  subdivision  three  of  Section  61  are 
changed  to  (a),  (b),  (c)  and  (d)  of  subdivision  five  of  Section  61, 
and  (e)  of  subdivision  three  is  changed  to  (c)  of  subdivision  six 
of  said  section. 

67-3  (b)  is  changed  by  adding  notes  or  obligations,  and  by 
changing  references  to  correspond  to  the  lettering  in  amended  Sec- 
tion 61;  (f),  (g),  (i)  and  (e)  of  subdivision  three  of  Section  61 
are  changed  to  (d),  (e)  (g),  (h)  and  (i)  of  subdivision  six,  Sec- 
tion 61. 

67-3 (c)  has  added  equipment  trust  certificates. 

67-3  (d).  (h)  of  subdivision  three  becomes  (f)  of  subdivision 
six.  Section  61.  There  is  added  to  this  paragraph  the  words,  "or 
on  securities  issued  by  a  mortgage  insurance  company  pursuant 
to  the  provisions  of  chapter  eight  of  title  two  of  part  four  of 
division  one  of  the  Civil  Code." 

67-3  (e)  now  provides  that  no  savings  bank  shall  loan  "on 
notes  or  bonds  of  the  character  specified  in  paragraphs  (a)  and  (b) 
of  subdivision  six  of  Section  61  of  this  act,  when  certified  as  legal 
investments  for  savings  banks  in  this  State  unless  such  notes  or 
bonds  shall  have  a  market  value  at  least  fifteen  percentum  in  excess 
of  the  amount  loaned  thereon." 

67-3  (f)  and  (g)  of  the  amended  section  are  the  same  as  (e) 
and  (f)  in  the  old  section.  Numbers  4,  5  and  6  of  the  new  section 
are  the  same  as  in  the  old  section.] 

Amount  and  char-       Section   68.      Every  savings  bank   or  savings  depart- 

acter  of  total  re-  riiiii  ii*  ••  i 

serves  of  savings  ment  oi  a  bank  shall  at  all  times  maintain  total  reserves 

T)ank  or  savings  bank  •        i  r  f      i 

department,  equivalent  to  tive  per  centum  or  the  aggregate  amount 
of  its  deposits,  exclusive  of  United  States,  postal  savings 
bank,  state,  county  and  municipal,  and  other  public 
money  deposits,  which  are  secured  as  is  required  by  law; 
at  least  two  and   one-half  per  centum  of  such  deposits 

May  be  maintained  shall  be  maintained  as  reserves  on  hand,   which  shall   con- 
as  reserves  on  hand,      .  riiiii-  r  f 

or  as  reserves  on  de-  sist  OF  gold  bullion,  or  any  lorm  ot  money  or  currency 
depositary,  authorized  by  the  laws  of  the  United  States,  and  two 
and  one-half  per  centum  of  such  deposits  may  be  main- 
tained as  reserves  on  hand,  which  shall  consist  of  bonds, 
or  interest  bearing  obligations  of  the  United  States,  of 
gold  bullion,  or  any  form  of  money  or  currency  author- 
ized by  the  laws  of  the  United  States  or  may  be  main- 

[112] 


SAVINGS  BANKS  §  68 


required  to 
reserves  on 


tained   as  reserves   on   deposit  subject   to   call   with   any 
reserve  depositary  provided   for  in  sections   twenty  and 
forty-three   of   this   act;    provided,    however,    that   all    or 
any   part   of  the   reserves  may  be   deposited,    subject   to 
call,  with  a  federal  reserve  bank  in  the  district  in  which 
such   bank   is   located;    provided,    also,    that   no    savings  savings  bank  or 
bank  or  savings  department  shall  be  required  to  main-  ^^i^tl'in 
tain  reserves  on  hand  in  excess  of  four  hundred  thousand  Jloo'^ooV^^'en' 
dollars,    and    when    such    reserves    on    hand    reach    that  JeaXthaTamount 
amount,  the  balance  of  total  reserves  necessary  to  make  ^urre^maki^ngup 
up  the  five  per  centum  may  be  kept  as  reserves  on  de-  ^     ^^^*" 
posit,    subject   to   call,    with  any  reserve   depositary  pro- 
vided for  in  sections  twenty  and  forty-three  of  this  act. 

If  any  savings  bank  shall  have  become  a  member  of  a  Reserves  required  of 

bank  becoming 

federal  reserve  bank,  it  shall  comply  with  the  reserve  re-  i"ember  of  Federal 

Reserve  bank. 

quirements  of  the  federal  reserve  act  and  its  amendments, 
and  its  compliance  therewith  shall  be  in  lieu  of,  and  shall 
relieve  such  savings  bank  or  savings  department  of  a  de- 
partmental bank  from  compliance  with  the  provisions  of 
this  section. 

If  any  savings  bank  shall  fail  to  maintain  its  total  re- 
serves in  the  manner  authorized  by  this  section,   it  shall 
be  subject  to  the  penalty  provided  for  in  section  twenty  Penalty. 
of  this  act  for  commercial  banks. 

No  new  loan  shall  be  made  during  any  deficiency  in  No  new  loan  while 

total  reserves  de- 

the  total  reserves.     Deposits  with  any  commercial  bank,  ficient. 

or  commercial  department  of  a  bank,  on  open  account,  as 

provided  in  this  section,  shall  be  permitted  and  shall  not 

be  construed  as  loans.      Not  more  than  five  per  centum  Consent  of  supt. 

required  for  savings 

of  the  deposits  of  any  savings  bank  shall  be  deposited  tanks  deposits  of 

more  than  5<^:'c 

with  any  one  bank,  except  with  the  consent  of  the  super-  with  any  one  bank 

1  r  1  1  -111  -11  °^  ^^''  ^'*^  '^°™' 

mtendent  or  banks;  provided,  that  any  savmgs  bank,  may  merciai  banks. 
deposit  with   any   one  bank  not  more   than   twenty-five 
thousand  dollars  without  the  permission  of  the  superin- 
tendent  of  banks.       Not   more   than    fifteen    per   centum 
of  the  deposits  of  any  savings  bank  shall  be  deposited 

[113] 


Proviso. 


§  68-69  BLYTH,  WITTER  &  CO. 

with  all   commercial  banks,    except  with  the  consent   of 

the  superintendent  of  banks.     No  savings  bank  or  savings 

department  shall  receive  deposits  of  other  banks  other 

No  savings  bank  or  than    savings    deposits    and    such    deposits    shall    not   be 

dept.  to  receive 

other  than  savings  treated  Or  Considered  as  a  part  of  the  reserves  on  de- 
deposits  of  other 
banks;  same  shall  posit  of  such  depositing  bank;   provided,   however,   that 

not  be  treated  as  -iiii 

part  of  reserves  on  the  sum  SO  deposited  shall  not  exceed  thirty  per  centum 
ing  bank.  Limita-  of  the  paid-in  Capital  and  surplus  of  the  depositing  bank, 

tion  upon  sum  so  ^  r  r  r     i  •  i   •  •      t 

deposited,  nor  morc  than  hrteen  per  centum  or  the  paid-in  capital 
and  surplus  of  the  depositary  bank. 

[Publishers'  note,  re  Section  68,  as  amended  1921: 
This  section  has  been  amended  to  provide: 

(1)  That  a  savings  bank  that  becomes  a  member  of  a  Federal  Reserve  Bank 
shall  comply  with  the  reserve  requirements  of  the  Federal  Reserve  Act  in  lieu  of 
reserve  requiremnts  of  the  State  Act.  Its  reserve  would  then  be  three  per  cent, 
instead  of  five  as  previously,   all  with  the  Federal  Reserve   Bank. 

(2)  That  any  savings  bank  may  deposit  with  any  one  bank  not  more  than  $25,- 
000  without  permission  of  the  superintendent  of  banks,  even  though  this  sum  ex- 
ceeds five  per  centum  of  the  bank's  deposits.] 

Public  administrator       Section    68J/2.     Where  a  decedent,  at  the  time  of  his 

may  allow  deposit  1  1  1       1     r  1  ...  .11 

of  decedent  to  remain  or  her  death,  left  moneys  on  deposit  w^ith  a  savings  bank, 

in  savings  bank   .,„,,,,,  ,  ,.  1       .     .  1  in 

where  deposited,  and  it  shall  be  lawtul  lor  any  public  administrator,  who  shall 

may  deposit  estate  ,  1  1       •     •  r      1  11  1 

moneys  therein,  become  the  administrator  of  the  estate,  to  allow  such 
deposit  to  remain  in  said  savings  bank,  and  also,  it  shall 
be  lawful  for  him  to  deposit  therein  to  the  account  of 
said  decedent,  any  and  all  moneys  of  said  estate  not 
required  for  the  current  expenses  of  administration. 
Effect  of  such  de-  Such  deposit,  whether  made  by  the  decedent  or  a  public 

posit.  "^  '^ 

administrator,  shall  relieve  the  public  administrator  from 
depositing  the  same  with  the  county  treasurer.  Moneys 
so  deposited,  whether  by  the  decedent  or  by  a  public 
Method  o^^'^th-  administrator,  may  be  drawn  upon  demand  without 
notice,  upon  the  order  of  said  administrator,  counter- 
signed by  a  judge  of  a  superior  court,  when  required  for 
the  purpose  of  administration  or  otherwise. 

colSfm^o'Act!  Section  69.  Every  savings  bank,  and  the  business  of 
every  savings  department  of  every  other  bank,  must  be 
conducted  under  and  in  accordance  with  the  provisions 
of  this  act. 

[114] 


COMMERCIAL  BANKS  §  70-80 


Section   70.     Every  savings  bank  shall  have  power  to  BavinKn  bank  may 

,.  i>ir  c       \  •  J    receive  as  df-positary, 

receive  as  depositary,  or  as  bailee  tor  sate  keeping  and  etc.,  Liberty  bonds 
storage,  Liberty  bonds  or  other  bonds  or  securities  issued 
by  the  United   States   government   for   wair   purposes  or 
otherwise. 


ARTICLE  111. 
COMMERCIAL  BANKS. 
Section   80.       No    commercial   bank    shall    make    any  commercial  banks 

IT          .1                    •       !•          ,1           .^                                                  C  not  to  loan  in 
oans,    directly    or    indirectly,    to    any    person,    nrm,    co-  amount  eiceeding 
1.                           ..         .                          ..L-u'ij  following  percent- 
partnership  or  corporation,   in  an  amount  which,  includ-  ages  of  capital 

ing  therein  any  extension  of  credit  to  such  person,  firm,  *°  »"'?"■• 
copartnership  or  corporation,  by  means  of  letters  of 
credit,  or  by  acceptance  of  drafts  for,  or  the  discount  or 
purchase  of  the  notes,  bills  of  exchange  or  other  obliga- 
tions of,  such  person,  firm,  copartnership  or  corporation, 
shall  exceed  the  following  percentage  of  its  capital  and 
surplus: 

1 .   Ten    per    centum    without    security,    except    where  io%  without 

1  •      1  1  1  1  •  1  security. 

such  capital  stock  and  surplus  is  not  more  than  twenty-  (Note  exceptions) 
five  thousand  dollars,  in  which  event  an  amount  not  to 
exceed  twenty  per  centum  of  such  capital  stock  and  sur- 
plus  may  be   loaned    without   security,    and   where    such 
capital  stock  and  surplus  is  greater  than  twenty-five  thous- 
and dollars  and  does  not  exceed   fifty  thousand  dollars, 
a  sum  not  exceeding  five  thousand  dollars  may  be  loaned 
without  security.     Nothing  herein  shall  prohibit  any  com-  fe*c'^^7or*pVot*°^ 
mercial  bank   from  taking  or  receiving  any  kind,   char- ^'^^^^^t^^g^.J^J^' 
acter  or  amount  of  security  whatsoever,    either  real   or 
personal,  for  the  protection  of  any  loan  made  under  the 
provisions  of  this  subdivision,  but  no  such  loan  or  any 
part  thereof  shall  be  considered  or  construed  as  a  secured 
loan   unless   the   whole   thereof  is  loaned   upon   security  cons^ered  secured 
worth  at  least  fifteen  per  centum  more  than  the  amount 
of  such  loan;  or, 

[115] 


§80  BLYTH,  WITTER  &  CO. 

(In  addition  to       2.    Fifteen  per  centum,  in  addition  to  the  amount  that 

amt.  loaned  under  _    _  r         i     i  •     •    • 

subd.  1)  16%  upon  niav  be  loaned  under  the  provisions  or  subdivision  one 

security  worth  at  "^  •  i  i  r  f 

least  15%  more  than  of  this  section,   upon  Security  worth  at  least  hrteen  per 

loan  secured.  r  i      i  J 

(Note  provisos)  centum  more  than  the  amount  or  such  loan  so  secured ; 
provided,  the  total  amount  which  can  be  loaned  under 
subdivisions  one  and  two  hereof  can  not  exceed  twenty- 
five  per  centum  in  all ;  provided,  however,  that  a  separate 
note  or  notes  shall  be  taken  for  the  unsecured  loans  and 
a  separate  note  or  notes  shall  be  taken  for  the  secured 
loans,  and  the  secured  and  unsecured  loans  shall  not  be 
combined  in  any  way  within  one  note,  or  notes;  or, 

ex^erdinVioan'ie^       ^'   Twcnty-five    per    centum    upon    security    worth    at 
cured  by  at  least  jg^^gj.   fifteen   per  centum   more   than   the   amount   of   its 

10%. 

loans  so  secured;  or, 
40%,  if  loan  on       4     Forty  per  centum,   provided  such  loans  are  upon 

commercial  paper  •'     *^  "■ 

owned  by  negotiator,  commercial    or   business    paper    actually    owned    by    the 

endorsed  without 

limitation,  person  negotiating  the  same  to  such  bank,   and  are  en- 
Note  provisos:  ^  00 

dorsed  by  such  person  without  limitation;  provided,  how- 
ever,  that  in  addition   to  the  amounts  permitted   to   be 
—re  combination  loaned  by  subdivisions  one,  two  or  three  of  this  section, 

loans  under  subd.  .   .  r  t    ^  1 

4  and  subd.  1,  2,  or  8.  an  amount  may  be  loaned  on  the  securities  fixed  by  sub- 
division four  of  this  section,  which  taken  with  the  amounts 
so  permitted  by  said  subdivisions  one,  two  or  three  will 

—restrictions  of  Sec.  ^ot  exceed  forty  per  centum ;  provided,  also  that  the  re- 

Bot  applicable  to  1  1   -ii  r 

drafts,  etc.,  with  strictions  under  this  section   shall  not  apply  to  bills  or 

B/I.8  attached,  etc. 

exchange  or  drafts,  with  bills  of  lading  attached,  drawn 
in  good  faith  against  actual  existing  values. 

drffts.\"*^aHsS  ^^y  Commercial  bank  may  accept  drafts  or  bills  of  ex- 
m  import ^or  export,  change  drawn  upon  it  having  not  more  than  six  months' 
shipments,  gjgi^t.  j-q  ^n,  exclusive  of  days  of  grace,  which  grow  out  of 
transactions  involving  the  importation  or  exportation  of 
goods;  or  which  grow  out  of  transactions  involving  the 
domestic  shipment  of  goods  provided  shipping  docu- 
ments conveying  or  securing  title  are  attached  at  the  time 
of  acceptance;  or  which  are  secured  at  the  time  of  accept- 
ance by  a  warehouse  receipt  or  other  such  document  con- 

[116] 


COMMERCIAL  BANKS  §  80 


veying    or    securing    title    covering    readily    marketable 
staples.      No  commercial  bank  shall  accept,  whether  in  a  um'lted'to  slecified 
foreign  or  domestic  transaction,  for  any  one  person,  com-  SpTn'impa'red  St 
pany,  firm,  or  corporation  to  an  amount  equal  at  any  time  **^  ""*  surplus. 
in  the  aggregate  to  more  than  ten  per  centum  of  its  paid- 
up  and  unimpaired  capital  and  surplus,  unless  the  bank  is 
secured  either  by  attached  documents  or  by  some  other 
actual  security  growing  out  of  the  same  transaction  as  the 
acceptance;   and   no  commercial  bank  shall   accept  such 
bills  to  an  amount  equal  at  any  time  in  the  aggregate  to 
more  than  one-half  of  its  paid-up  and  unimpaired  capital 
and  surplus;  provided,  however,  that  the  superintendent  ^^P*;^Treg?;utYon. 
of  banks,  under  such  general  regulations  as  he  may  pre-  ^^,'^°J'^;  ^to°  m% 
scribe,  which  shall  apply  to  all  commercial  banks  alike  re-  l^^'^^^^;"^  *'"* 
gardless  of  the  amount  of  capital  and  surplus,  may  author- 
ize any  commercial  bank  to  accept  such  bills  to  an  amount 
not  exceeding  at  any  time  in  the  aggregate  one  hundred 
per  centum  of  its  paid-up  and  unimpaired  capital  and  sur- 
plus; provided,  further,  that  the  aggregate  of  acceptances 
growing  out  of  domestic  transactions  shall  in  no  event  f °eTni"t  to'exc^ed 
exceed  fifty  per  centum  of  such  capital  and  surplus.  ^"^'=- 

Any  commercial  bank  may  accept  drafts  or  bills  of  ex-  fj^^^  Siaf ts'dra^n 
change  drawn  upon  it  having  not  more  than  three  months'  ^„^/°;?jfo3e''o7doUar 
sight  to  run,  exclusive  of  days  of  grace,  drawn  under  regu-  exchange,  etc. 
lations  to  be  prescribed  by  the  superintendent  of  banks 
by  banks  or  bankers  in  foreign  countries  or  dependencies 
or  insular  possessions  of  the  United  States  for  the  purpose 
of  furnishing  dollar  exchange  as  required  by  the  usages  of 
trade  in  the  respective  countries,  dependencies,  or  insular 
possessions;  provided,  however,  that  no  commercial  bank 
shall  accept  such  drafts  or  bills  of  exchange  referred  to 
in  this  paragraph  for  any  one  bank  to  any  amount  ex-  Limit  in  amount  of 

,.  ■         1  .        .  t  £    1.U       — „:  J   ,,^   such  drafts,  etc., 

ceedmg  m  the  aggregate  ten  per  centum  or  tne  paia-up  ^^nk  may  accept  for 

1  .  .1  .11  1  £  iL  *.*  K        U    any  one  bank  unless 

and  unimpaired  capital  and  surplus  or  the  accepting  oanK  ^^^^^  ^jtie  documentg 
unless  the  draft  or  bill  of  exchange  is  accompanied  by  "  security. 
documents  conveying  or  securing  title  or  by  some  other  General  limitation 

.    I    upon  amount  of 

adequate  security;  provided,  further,  that  no  commercial  acceptances. 

[1171 


§  80  BLYTH,  WITTER  &  CO. 

bank  shall  accept  such  drafts  or  bills  in  an  amount  exceed- 
ing at  any  time  the  aggregate  of  one-half  of  its  paid-up 
and  unimpaired  capital  and  surplus. 

No  limitatiens  in       None  of  the  limitations  or  restrictions  contained  in  the 

apply  trioans^"etc.!  prcvious  subdivisions  of  this  section  shall  apply  to  loans, 

bonds^'^or  other  XT.  s.  discounts  or  Other  extensions  of  credit  secured  by  Liberty 

'  bonds   or   by   other   bonds   or   securities   bsued   by   the 

United  States  government,  if  the  market  value  of  such 

Liberty  bonds   or  other  securities   exceeds   by  ten   per 

centum  the  eunount  of  any  such  loan,  discount  or  other 

extension  of  credit. 

Loans  by  commercial       Loans   which    are    made    upon    security   available    for 

bank  on  security  for   ,  .  •  i  i  i  i       •  •    l 

savings-bank  loans,  loans  m  a  savmgs  bank  may  be  made  in  a  commercial 

deemed  secured   ,  ,  ,  .....  .  I 

loans  under  Sec.  bank  upon  the  Same  margin  or  security  as  is  permitted 
to  savings  banks  anything  in  this  section  to  the  contrary 
notwithstanding,  and  all  such  loans  shall  be  deemed  to 
be  secured  loans  within  the  meaning  of  this  section. 

Total  liabilities  of  In  Computing  the  total  liabilities  of  any  person  to  a 
merciai  bank,— how  Commercial  bank  there  shall  be  included  all  liabilities  to 
the  bank  of  any  copartnership  or  unincorporated  associa- 
tion of  which  he  is  a  member,  and  any  loans  made  for 
his  benefit  or  for  the  benefit  of  such  copartnership  or  un- 
incorporated association;  of  any  firm,  copartnership  or 
unincorporated  association  to  a  commercial  bank  there 
shall  be  included  all  liabilities  of  its  individual  members 
and  all  loans  made  for  the  benefit  of  such  copartnership 
or  unincorporated  association  or  any  member  thereof; 
and  of  any  corporation  to  a  commercial  bank  there  shall 
be  included  all  loans  made  for  the  benefit  of  the  cor- 
poration. 

[Publishers  note,  re  Section  80,  as  amended  1921: 

This  section  has  been  amended  as  follows: 

In  subdivision  three  the  clause  in  the  old  act  beginning  "Pro- 
vided, however,      *    *    *    ^"  jj^s  been  omitted. 

Subdivision  four  has  been  amended  in  that  part  of  it  applying 
to  acceptances.  The  new  provision  is  identical  w^ith  the  provisions 
of  the  Federal  Reserve  Act  authorizing  national  banks  to  accept, 

[118] 


COMMERCIAL  BANKS §  80-82 

save  the  substitution  of  the  "superintendent  of  banks"  for  the  "Fed- 
eral Reserve  Board."  Hereafter  State  banks  in  California  will  be 
able  to  accept  on  equal  terms  with  national  banks.] 

Section    8  1 .      No  loan  shall  be  made  by  any  commer-  Loans  upon  corporate 

.,11  I  .    .  (  securities  where  pay- 

cial   bank  upon   the  securities   or  one   or  more   corpora-  ment  undertaken, 

I  fi'i-  11  -Li  severally,  by  two  or 

tions,   the  payment  or  which  is  undertaken,   in  whole  or  more  persons,  firms, 

II  1  '     •       1  1  .       |.      or  corporations, — 

in  part,  severally,   but  not  jointly,  by  two  or  more  indi-  when  forbidden. 
viduals,   firms,  or  corporations: 

(a)  If  the  borrowers  or  underwriters  be  obligated 
absolutely  or  contingently  to  purchase  the  securities,  or 
any  of  them,  collateral  to  such  loan,  unless  the  bor- 
rowers or  underwrriters  shall  have  paid  on  account  of  the 
purchase  of  such  securities  an  amount  in  cash,  or  its 
equivalent,  equal  to  at  least  twenty-five  per  centum  of 
the  several  amounts  for  which  they  remain  obligated  in 
completing  the  purchase  of  such  securities; 

(b)  If  the  commercial  bank  making  such  loan  be 
liable,  directly  or  indirectly,  or  contingently,  for  the  re- 
payment of  such  loan  or  any  part  thereof; 

(c)  If  its  term,  including  any  renewal  thereof  by  agree- 
ment, express  or  implied,  exceed  the  period  of  one  year; 

(d)  Or  to  an  amount  under  any  circumstances  in  ex- 
cess of  twenty-five  per  centum  of  the  capital  and  surplus 
of  the  commercial  bank  making  such  loan. 

Section   82.     Every  commercial  bank  hereafter  organ-  Paid-up  capital 
ized  must  have  paid  up  in  cash  a  capital  stock  of  not  less 
than, 

(a)  Twenty-five  thousand  dollars  if  its  principal  place  population  not  over 

i-    1         .  .1  1     •  1  T.        .^1  1     I.-  £    5.000 — 825,000. 

of  business  is  located  in  any  locality  the  population  or 
which  does  not  exceed  five  thousand  persons; 

(b)  Fifty   thousand    dollars   if   its   principal    place   of  5. coo  to  25,000 

^     '  ■^  ^  population — ?50,000. 

business  is  located  in  any  city  the  population  of  which 
is  more  than  five  thousand  persons  but  does  not  exceed 
twenty-five  thousand  persons; 

[1191 


§  82  BLYTH.  WITTER  &  CO. 

25,000  to  100,000        (c)    One    hundred    thousand    dollars    if    its    principal 

population— $100,000.  ^     ^  ^  _  . 

place  of  business  is  located  in  any  city  the  population  of 
which  is  more  than  twenty-five  thousand  persons  but 
does  not  exceed  one  hundred  thousand  persons; 

100,000  to  200,000        (d)    Two    hundred    thousand    dollars   if   its   principal 

population— $200,000       ,  r  i         •  •      i  i    •  •  i  i       •  r 

place  or  business  is  located  m  any  city  the  population  or 
which  is  more  than  one  hundred  thousand  persons  but 
does  not  exceed  two  hundred  thousand  persons; 

Population  exceeding        (e)    Three  hundred   thousand   dollars  if  its   principal 

200.000 — $300,000.  ,         .  ,  .  .  . 

place  of  business  is  located  in  any  city  the  population  of 
which  is  more  than  two  hundred  thousand  persons. 

^Tion^not  retrospec-       ^^^    foregoing    classification    shall    not    apply   to    any 
*r\'!°Jv!^^^\'^^'''^  commercial  bank  already  in  existence  which  has  received 

to  banks  incluaea  •' 

by  annexat^ion^  etc.,  jjg  certificate  to  do  a  banking  business  from  the  superin- 
tendent of  banks;  nor  to  any  bank  the  location  of  which 
shall  have  been  included  by  annexation  or  consolidation 
within  the  limits  of  a  city  of  a  class  requiring  a  larger 
bank  may°o^pen  new  Capitalization,  but  no  bank  thus  excepted  shall  be  per- 
fro'^m°pre-annIx™tton  niitted  to  establish  any  new  branch  office  as  provided  in 
have  capltai'^requiied  section  nine  of  this  act  or  to  remove  its  place  of  business 
of  unexcepted  banks,  f^.^^  ^^^  original  limits  of  the  city  or  township  wherein 
it  was  located  prior  to  such  annexation  or  consolidation 
until  it  shall  have  the  capital  required  of  banks  in  such 
city   not  within   said    exception.      Such    excepted   banks 
may  not  in  any  case  decrease  their  capital  stock  but  may 
Decrease  and  increase  increase  the  same  in  the  manner  provided  by  law  to  an 
of  capital  stock  of  amount  either  greater  or  less  than  that  required  of  banks 

excepted  banks.  °  ^ 

in   such   city  not  within   said   exception;    provided,    that 

nothing  herein  shall  be  construed  to  affect  the  provisions 

of  section  nineteen  of  this  act  relative  to  the  proportion 

Provisions  of  Sec.  of  capital  and  surplus  to  deposits  or  of  section  twenty- 
is  re  proportion  of,  ri-  i-  i  •!  l  -ir 

capital  and  surplus  three  of  this  act  relative  to  the  capital  stock  required  or 

to  deposits,  etc.,  i  i         i     .  i  i   i         •  -n  •    •  e 

not  affected  by  Sec.  banks  doing  a  departmental  business.      1  he  provisions  or 
Population  provisions  section  twenty-three  of  this  act,   as  to  population,   shall 

applicable  to  banks  i       .  -i  i  •        j  j         j.l_  •    •  £   iL  • 

organized  under  Sec.  ripply  to  any  bank  organized  under  the  provisions  or  this 
section;  provided,  however,  that  nothing  herein  contained 

[120] 


COMMERCIAL  BANKS  §  82-83 

shall  prevent  the  superintendent  of  banks  in  the  exercise  Bank  hereafter 

organized  in  locality 

or  his  discretion   from   granting  his  license  to  any  bank  included,  by  annexa- 

1  r  •         1    •  1  1-  1-11  1  -111    tion  in  city  requiring 

herearter  organized  in  a  locality  which  has  been  included  larger  capitalisation 

,  .  1-  1       •  •   1   •         L       1-       •  c  •         —paid-up  capital 

by  annexation  or  consolidation  within  the  limits  or  a  city  required 
requiring  a  larger  capitalization  w^ith  a  capital  stock  paid 
up  in  cash  equal  to  that  which  would  have  been  required 
for  said  locality  if  it  had  not  been  included  by  annex- 
ation or  consolidation  within  the  limits  of  a  city  requiring 
a  larger  capitalization;  provided,  that  no  bank  so  licensed 
shall  be  permitted  to  establish  any  branch  office  as  pro- 
vided in  section  nine  of  this  act  or  to  remove  its  place  of  Capital  of  such  bank, 

opening  new  branch 

business  from  the  original  limits  of  the  city  or  township  or  removing  from  pre- 

.  annexation  location. 

which  has  been  included  by  annexation  or  consolidation 
within  the  limits  of  a  city  requiring  a  larger  capitalization 
until  it  shall  have  the  capital  required  of  banks  in  such 
city  requiring  said  larger  capitalization. 

[Publishers'  note,  re  Section  82,  as  amended  1921: 

This  section  has  been  amended  by  the  addition  of  a  paragraph  identical  in  pur- 
port to  the  amendment  to  Section  23,  relative  to  bank  included  by  annexation  in 
city  requiring  larger  capitalization,  etc.] 

Section   83.     No  loan  shall  be  made  for  himself  or  as  Provisions  governing 

loans,  credit,  to 

asent  or  partner  of  another,  directly  or  indirectly,  to  any  officers,  directors, 

or-  111  1        agents,  etc.,  of  bank; 

officer  of  any  commercial  bank  by  such  bank  or  on  the  or  on  endorsement  of 

1  /-r"  same,  to  firms,  cor- 

endorsement,    surety,    or   guaranty   of   any   such    officer;  porations,  etc.,  with 

,  which  they  are 

provided,  that  a  loan  may  be  made  to  a  corporation  of  connected. 
which  any  officer  of  a  commercial  bank,  proposing  to 
make  such  loan,  is  a  minority  stockholder,  director,  offi- 
cer, agent  or  employee.  Loans  to  any  director,  agent  or 
employee  other  than  an  officer,  or  to  any  firm,  copartner- 
ship or  corporation  of  which  any  director,  agent  or  em- 
ployee other  than  an  officer  is  a  member,  stockholder, 
director,  officer,  agent  or  other  employee,  or  to  any 
person,  firm,  copartnership  or  corporation  on  the  en- 
dorsement, surety,  or  guaranty  of  any  such  director  other 
than  an  officer,  agent  or  other  employee,  can  be  made 
by  any  commercial  bank;  and  provided,  further,  that  a 
loan  may  be  made  or  a  line  of  credit  may  be  given  to 
any  member  of  an  advisory  board  or  body  of  a  commer- 

[121] 


§  83  BLYTH.  WITTER  &  CO. 

cial  bank,  not  otherwise  an  officer  of  such  bank,  or  a  loan 
may  be  made  to  any  firm,  copartnership  or  corporation 
of  which  any  member  of  such  advisory  board  or  body  is 
a  member,  stockholder,  director,  officer,  agent  or  other 
employee,  or  to  any  person,  firm,  copartnership,  or  cor- 
poration on  the  endorsement,  surety,  or  guaranty  of  any 
such  member  of  such  advisory  board  or  body  upon  such 
conditions  as  are  herein  fixed  for  a  loan,  directly  or  in- 
directly, or  a  line  of  credit  and  the  report  thereof  to 
any  director  of  such  bank.  Loans  herein  authorized 
can  be  made  only  on  authorization  of  or  confirmation 
within  thirty  days  after  making  such  loan,  by  a  majority 
of  all  the  directors  of  such  bank  and  the  affirmative  vote 
of  all  directors  of  such  bank  present  at  the  meeting 
authorizing  or  confirming  such  loan.  Such  interested 
rprovisions  governing  director  shall  not  vote  or  participate  in  any  manner  in 

above  loans. 

(Cont'd.)  the  action  of  the  board  on  such  loan;  provided,  that  by 
and  with  the  consent  of  the  superintendent  of  banks  pre- 
viously obtained  in  writing,  all  directors  may  vote  upon 
such  a  loan  made  by  one  bank  to  another  bank  where 
the  entire  capital  stock  of  one  is  owned  by  or  held  in 
trust  for  the  stockholders  of  the  other  bank  and  where 
all  or  a  majority  of  the  board  of  directors  of  each  of 
said  banks  are  composed  of  the  same  persons.  The 
board  of  directors  of  any  such  bank  may  fix  the  total 
amount  of  credit  that  may  at  any  one  time  during  the 
twelve  months  next  succeeding  be  given  to  any  director, 
agent,  or  other  employee,  other  than  an  officer,  or  to  any 
firm,  copartnership,  or  corporation  in  which  any  director, 
agent,  or  other  employee  other  than  an  officer  is  a  mem- 
ber, stockholder,  director,  officer,  agent  or  other  em- 
ployee or  to  any  corporation  of  which  any  officer  of  a 
commercial  bank,  proposing  to  fix  such  total  amount  of 
credit,  is  a  minority  stockholder,  director,  officer,  agent 
or  employee,  and  any  or  all  loans  made  within  or  up  to 
the  total  amount  of  such  authorized  credit  may  at  any 
time  during  said  twelve  months  be  renewed  from  time 

[122] 


COMMERCIAL  BANKS §  83 

to  time,  in  whole  or  in  part,  by  the  officers  of  the  bank 
without  any  further  vote  or  action  on  the  part  of  the 
board  of  directors.  Each  such  authorization  shall  be 
entered  upon  the  records  or  minutes  of  said  bank.  No 
director  shall  vote  or  participate  in  any  manner  in  such 
action  of  the  board  fixing  the  total  amount  of  credit  that 
may  at  any  one  time  be  given  to  himself  or  to  any  firm, 
copartnership  or  corporation  in  which  he  is  a  member, 
stockholder,  director,  officer,  agent  or  other  employee. 
The  fact  of  making  such  loan,  the  name  of  the  director  Facts  concerning 

^  such  loans  to  be  re- 

authorizing such  loan,  the  name  of  the  director,  agent  or  ported  to  supt. 

employee,  obtaining  such  loan,  or  the  name  of  the  firm, 
copartnership  or  corporation  in  which  such  director, 
agent  or  employee  is  interested,  or  the  name  of  the  cor- 
poration, of  which  any  officer  of  a  commercial  bank  is  a 
minority  stockholder,  director,  officer,  agent  or  employee, 
obtaining  such  loan,  the  amount  of  such  loan,  the  rate 
of  interest  thereon,  the  time  when  the  loan  will  become 
due,  the  amount,  character  and  value  of  security  given 
therefor,  if  any,  and  the  fact  of  final  payment  when  made 
shall  forthwith  be  reported  in  writing  by  the  cashier  or 
secretary  of  such  bank  to  the  superintendent  of  banks; 
provided,  that  any  loan  made  to  any  corporation  of  which  tionsf  in  which'^bank 

dff  .  1  f  1.  directors,  officers, 

irector,  orhcer,  agent  or  employee  or  such  commer-  etc..  are  interested— 

.,,,  ^  r  £1_'J*       when  not  to  be 

cial  bank  owns  not  more  than  hve  per  cent  or  the  paid-in  reported. 
capital  of  such  borrowing  corporation  nor  any  loan  made 
to  any  corporation  which  any  two  or  more  directors,  offi- 
cers, agents  or  employees  of  such  commercial  bank  own 
not  more  than  twenty  per  cent  of  the  paid-in  capital  of 
such  borrow^ing  corporation  shall  not  be  reported  to  the 
superintendent  of  banks.  In  case  a  loan  is  made  to  a 
corporation  there  shall  be  reported  in  the  same  man- 
ner the  name  of  each  director  and  officer  of  such  bank 
who  is  a  member,  stockholder,  director,  officer  or  em- 
ployee of  such  borrowing  corporation  and  the  amount 
of   stock   held   by  him   in    such   borrowing   corporation. 

[123] 


§83  BLYTH,  WITTER  &c  CO. 

Provisions  of  Sec.  /^\\    t^g    provisions    of    this    scction    relating    to    reports 

as  to  reports  apply  ^  .  r  i-  i       n    i  l 

to  granting  of  credit,  ghall  apply  to  the  granting  or  credit  and  all  loans  made 

under    any    credit    given    and    payments    made    thereon 

shall    also   be    reported    immediately   after    the   same    is 

Report  to  be  made  made.      In   case   of   a   loan   made   without  the   previous 

of  loan  without  pre-  r  l   •  L 

vious  authorization,  authorization  of  the  directors,  the  fact  of  making  such 
loan  shall  forthwith  be  reported  and  the  action  of  the 
board  of  directors,  in  confirming  or  refusing  to  confirm 
such  loan  within  thirty  days  thereafter,  and  the  fact  of 
final  payment  when  made  shall  be  reported  in  the  same 
manner  as  herein  required  for  loans  made  under  previous 

Procuring  loan  con-  authorization.     Any  officer,  director,  agent,  or  employee 

trary  to   section,  i    i  i  i         i  •        i  1 

felony,  of  a  Commercial  bank,  who  knowingly  procures  a  loan 

from  such  commercial  bank  contrary  to  the  provisions  of 

Penalty  for  failure  this  section,  shall  be  guilty  of  a  felony.      In  case  of  the 

to  report.  /..,/•     i  ^  •  t  U 

neglect  or  failure  of  the  secretary  or  cashier  ot  any  such 
bank  to  report  to  the  superintendent  of  banks,  as  herein 
provided,  any  of  the  facts  so  required  to  be  reported,  or 
in  case  of  the  neglect  or  failure  of  the  secretary  or 
cashier  of  any  such  bank  to  report  to  the  superintendent 
of  banks  any  loan  made  contrary  to  the  provisions  of 
this  section,  the  bank  shall  be  liable  therefor  and  shall 
forfeit  to  the  people  of  the  state  of  California  twenty-five 
dollars  per  day  for  each  day,  or  part  thereof,  during 
which  such  neglect  or  failure  continues. 

Loans  to  religious       jj^j     section  shall  not  apply  to  any  loan  made  to  a 

corporations,  etc.,—  *- r    ^  ^^ 

""^'pilc'^MeTereto:  religious  Corporation,  club,  or  other  membership  cor- 
poration  of  which  one  or  more  directors,  officers,  agents 
or  employees  of  such  commercial  bank  may  be  members 
or  officers  but  in  which  they  have  no  financial  interest. 

Loans  to  corporation,        j^Jq  Joan  may  be  made  to  any  corporation,  a  majority 

where  majority  •'  "^ 

i,y1°rtct''oTs"'etc!,'of  oi  the  stock  of  which  is  owned  or  controlled  by  any  one 
bank-restricted.  ^^  more  of  the  directors  or  officers,  or  directors  and  offi- 
cers of  such   commercial  bank  collectively,   except  with 
the  previous  consent  of  the  superintendent  of  banks. 

[124] 


TRUST  COMPANIES  §  83-90 


Loans  may  be  made  to  any  director,  other  than  an  Loan  may  be  made 

to  director  (not 

officer,   directly  or  indirectly,   or   to   any  agent   or   em-  officer)  or  agent  or 

'  '  ^  .  .,    employee  of  comm'l 

ployee  of  a  commercial  bank,  on  the  security  of  United  tank,  on  security  of 

■^      -^  ^  .  .         U.  S.  bonds  or  ob- 

States  bonds,  United  States  treasury  certificates,  or  in-  ligations. 
terest-bearing  notes,  or  obligations  of  the  United  States, 
or  those  for  which  the  faith  and  credit  of  the  United 
States  are  pledger!  for  repayment  of  principal  or  in- 
terest, or  those  issued  under  authority  of  the  United 
States,  notwithstanding  anything  in  this  section  con- 
tained, and  such  loans  may  be  made  in  the  usual  man- 
ner of  making  loans  in  which  no  director  of  such  bank  is 
interested. 

[Publishers'  note,  re  Section  83,  as  amended  1921: 

This  section  has  been  amended  by  adding  a  proviso  that  any  loan  made  to  any 
corporation,  of  which  any  director,  officer,  agent,  or  employee  of  a  commercial  bank 
owns  not  more  than  five  per  centum  of  the  paid-in  capital  of  the  borrowing  corpo- 
ration, and  any  loan  made  to  any  corporation  of  which  any  two  or  more  directors, 
officers,  agents  or  employees  of  such  commercial  bank  own  not  more  than  twenty 
percentum  of  the  paid-in  capital  of  such  borrowing  corporation,  shall  not  be  re- 
ported to  the  superintendent  of  banks.] 

Section    84.      No    commercial    bank    shall    invest    an  Limited  investment 

, .  .  .1  •      1  J  1  •       1.U       permitted  in  bank 

amount  exceedmg  its  paid-up  capital  and  surplus  in  the  premises. 
lot  and  building  in  which  the  business  of  the  bank  is  car- 
ried on,  furniture  and  fixtures,  vaults  and  safe  deposit 
vaults  and  boxes  necessary  or  proper  to  carry  on  its 
banking  business;  and  hereafter  the  authority  of  a  two- 
thirds  vote  of  all  the  directors  shall  be  necessary  to 
authorize  the  purchase  of  such  lot  and  building  or  the 
construction  of  such  building. 

Section   85.     The  superintendent  of  banks  shall  have  supt.  may  limit  de- 

,..,  criiLi.  UJ         posits  with  other 

power   to   limit   the   amount  or   runds   that  may   be   de-  commercial  bank. 
posited  by  any  commercial  bank  with   any  other  com- 
mercial  bank. 

ARTICLE  IV. 
TRUST  COMPANIES. 
Section   90.     Any  corporation  which  has  been  or  shall  what  constitutes  « 

....      trust  company. 

be  incorporated    under   the   laws   of   this   state,    which   is 
authorized  by  its  articles  of  incorporation  to  act  as  exe- 

[125] 


§  90  BLYTH.  WITTER  &  CO. 


cutor,  administrator,  guardian  of  estates,  assignee,  re- 
ceiver, depositary  or  trustee,  under  appointment  of  any 
court  or  by  authority  of  any  law  of  this  state,  or  as 
trustee  for  any  purpose  permitted  by  law,  which  has  its 
principal  place  of  business  in  a  city  in  which  the  popula- 
tion does  not  exceed  one  hundred  thousand  persons  and 
As  to  trust  company  which  has  a  Capital  of  not  less  than  one  hundred  thousand 

in  city  of  population     in  n  .   ,    .  .  i  .  l  .1    1   1 

»ot  over  100,000  \pith  dollars  actually  paid  in,  in  cash,  assigned  to  or  available 

paid-in  capital    -  ,  r  1        .  •  1         •  •  1. 

not  less  than  for    the    purpose    or    conducting    business    in    any    such 

$100,000  assigned  .  ..i-  r  l_  .  -i,!.!!. 

to  trust  business.  Capacity,  or  trust  business  or  any  character  permitted  by 
law,  and  which  has  made  with  the  state  treasurer  the 
deposit  of  money  or  securities  of  the  character  and  in 
the  amount  required  by  the  terms  of  section  ninety-six 
of  this  act,  and  which  has  received  from  the  superintend- 
ent of  banks  the  certificate  of  authority  required  by  the 
terms  of  section  one  hundred  twenty-seven  of  this  act, 
to  transact  such  business,  and  any  corporation  which  has 
been  or  shall  be  incorporated  under  the  laws^  of  this 
state,  which  is  authorized  by  its  articles  of  incorporation 
to  act  as  executor,  administrator,  guardian  of  estates,  as- 
signee, receiver,  depositary  or  trustee,  under  appointment 
of  any  court  or  by  authority  of  any  law  of  this  state,  or 
As  to  trust  company  as  trustee  for  any  purpose  permitted  by  law,  which  has 

in  city  of  population  r  -i         •  •  ••  l^'LL 

exceeding  100,000  its  principal  placc  of  business  m  a  city  m  which  the  popu- 

with  paid-in  capital  1111  1  ll_'L 

of  at  least  $200,000  lation  excecds  one  hundred  thousand  persons  and  which 

assigned  to  trust  .      1        r  1  1  i         i     ^1  1     J     11 

business,  has  a  capital  of  at  least  two  hundred  thousand  dollars 
actually  paid  in,  in  cash,  assigned  to  or  available  for  the 
purpose  of  conducting  business  in  any  such  capacity,  or 
trust  business  of  any  character  permitted  by  law,  and 
which  has  made  with  the  state  treasurer  the  deposit  of 
money  or  securities  of  the  character  and  in  the  amount 
required  by  the  terms  of  section  ninety-six  of  this  act, 
and  which  has  received  from  the  superintendent  of  banks 
the  certificate  of  authority  required  by  the  terms  of  sec- 
tion one  hundred  twenty-seven  of  this  act,  to  transact 
such  business,  may  act,  or  may  be  appointed  by  any 
court  to  act,  in  any  such  capacity  in  like  manner  as  an 

[126] 


TRUST  COMPANIES  §  90 


individual  and  when  so  qualified  shall  be  known  as  a 
trust  company.  Any  such  trust  company  may,  as  pro-  fr°J^t "  ^""^^"^^  °° 
vided  in  this  act,  accept  or  receive  any  deposit  of  money 
or  personal  property  authorized,  directed  or  permitted  to 
be  made  with  any  such  corporation  by  any  court  or  law 
of  this  state,  and  may  accept  and  execute  any  trust  pro- 
vided for  in  this  act,  or  permitted  by  any  law  of  this 
state,  to  be  taken,  accepted  or  executed  by  an  individual. 
Any  such  trust  company,  if  located  in  a  city  the  popula-  Trust  company  in 

•'  sr        J  ^  •'  pjty  of  population 

tion  of  which  does  not  exceed  one  hundred  thousand  per-  not  over  100,000  to 

apportion  capital  and 

sons  must  segregate  that  portion  of  its  capital  and  surplus  ^^;pj^^\^^'^'®^^^**f 
assigned  to  or  available  for  its  trust  business  and  must  p^'-^^ate  and  court 
apportion  and  set  aside  at  least  fifty  thousand  dollars  of 
such  paid-up  capital  as  security  for  the  faithful  perform- 
ance and  execution  of  all  private  trusts  accepted  by  it 
and    must    also    apportion    and    set    aside    at   least    fifty 
thousand  dollars  of  such  paid-up  capital  as  security  for 
the  faithful  performance  and  execution  of  all  court  trusts 
accepted  by  it  and  whenever  such  trust  company  shall, 
under   the   provision    of   sections   ninety-six   and   ninety-  ^;°^;;'„Vd'e"r1ecs. 
eight  of  this  act,  be  required  to  make  the  first  additional  ^Lra'^ddftiWde- 
deposit  of  securities  with  the  state  treasurer,   such  trust  ^Tth  sute'Treafurer, 
company  must  also  apportion  and  set  aside  an  additional  ^^tZai  amounts  of' 
fifty  thousand  dollars  of  paid-up  capital  as  security  for  Pe^i^;^^/^-" 
the    faithful    performance   and    execution    of    all    private  l;7r;;t  trusts"*' 
trusts  accepted  by  it  and   must  also   apportion  and   set 
aside   an    additional    fifty    thousand    dollars    of    paid-up 
capital  as  security  for  the  faithful  performance  and  exe- 
cution of  all  court  trusts  accepted  by  it,   and  any  such 
trust  company,    if  located   in   a   city,    the  population   of  guch  trust  company. 

,.,  ,  iiitl_  J  i.if  located  in  city  of 

which    exceeds    one    hundred    thousand    persons,    must  population  exceeding: 

,  .  r   .  '11  1  -J    100,000  must  segre- 

segregate  that  portion  of  its  capital  and  surplus  assigned  gate  capital  and 

.,,,-,  I         .  1  .  .  •  surplus  assigned  to 

to  or  available  for  its  trust  business  and  must  apportion  trust  business,  and 
and  set  aside  at  least  one  hundred  thousand  dollars  of  jioo.ooo  thereof  as 
such  paid-up  capital  as  security  for  the  faithful  perform-  mance  of  its  private 
ance  and  execution  of  all  private  trusts  accepted  by  it 
and  must  also  apportion  and  set  aside  an  additional  fifty 

[127] 


§90  BLYTH.  WITTER  &  CO. 


Amounts  of  capital  thousand   dollars  of  paid-up  capital   as  security  for  the 

or  capital  and  surplus  _  r       ii  • 

so  apportioned  to  be  faithful  performance  and  execution  of  all  private  trusts 

treated  as  separate  i         -  i  i  •  i  •  i 

capital  or  capital  accepted  by  it  and  must  also  apportion  and  set  aside  an 

and  surplus  of  each  _  iz-r  i  iiii  r  -i  •! 

class  of  business,  etc.  additional  fifty  thousand  dollars  of  paid-up  capital  as 
security  for  the  faithful  performance  and  execution  of  all 
court  trusts  accepted  by  it,  and  any  such  trust  company, 
if  located  in  a  city,  the  population  of  which  exceeds  one 
hundred  thousand  persons,  must  segregate  that  portion  of 
its  capital  and  surplus  assigned  to  or  available  for  its  trust 
business  and  must  apportion  and  set  aside  at  least  one 
hundred  thousand  dollars  of  such  paid-up  capital  as  se- 
curity for  the  faithful  performance  and  execution  of  all 
private  trusts  accepted  by  it  and  must  also  apportion  and 
set  aside  at  least  one  hundred  thousand  dollars  of  such 
paid-up  capital  as  security  for  the  faithful  performance 
and  execution  of  all  court  trusts  accepted  by  it;  provided, 
that  no  such  trust  company  shall  at  any  time  be  required 
to  apportion  and  set  aside  any  portion  of  its  surplus  as 
security  for  the  faithful  performance  and  execution  of 
such  private  trusts,  nor  shall  it  be  prohibited  from  so 
doing;  and  provided,  further,  that  the  respective  amounts 
of  capital  or  capital  and  surplus  so  apportioned  and  set 
aside  shall  be  treated  in  all  respects  as  the  separate  capital 
or  capital  and  surplus  of  each  respective  kind  or  class  of 
business,  as  though  the  same  were  conducted  by  separate 
and  distinct  corporations,  and  each  shall  be  kept,  held, 
used  and  disposed  of  wholly  for  the  exclusive  benefit,  pro- 
tection and  security  of  the  respective  classes  of  trust  busi- 
ness to  which  the  same  were  respectively  so  apportioned 
Where  executor,  ad-  and  set  aside.    In  all  cases  in  which  it  is  required  that  an 

ministrator,  etc.,  to 

qualify  by  taking  executor,  administrator,  guardian  of  estates,  assignee,  re- 
oath,  etc.,  or  where  , 

afladavit  required,  ceiver,  depositary  or  trustee  shall  qualify  by  taking  and 

same  may  be  taken  or   '^'-•'"-*'    v^v-^^  j  -,  ^ 

dent"etc^.1 8^^  Subscribing  an  oath,  or  in  which  an  affidavit  is  required,  it 

fanure°ofiru^st^com!  s^all  be  a  Sufficient  qualification  by  such  corporation  if 

"""TelaiTuUe"  such  oath  be  taken  and  subscribed   or  such  affidavit  be 

made  by  the  president,  vice-president,  secretary,  manager, 

trust  officer  or  assistant  trust  officer,  and  such  officer  shall 

[128] 


TRUST  COMPANIES  §  90 

be  liable  for  the  failure  of  such  trust  company  to  perform 
any  of  the  duties  required  by  law  to  be  performed  by  an 
individual  acting  in  the  capacity  and  subject  to  like  pen- 
alties; provided,  any  such  appointment  as  guardian  shall  guaSrapSues  to 
apply  to  the  estate  only,  and  not  to  the  person.  *^®  "****"  °^^^- 

Any   trust   company   upon  becoming   a   member   of   a  Trust  company  be- 

I         .         I  I  ,  coming  member  of 

federal  reserve  bank  is  authorized  and  empowered :  Federal  Reserve 

bank  may  continue 

To  continue  to  administer,  execute,  enjoy  and  exercise  etc*;Tn"flduciary 
all  court  and  private  trusts  as  defined  in  the  bank  act,  etc. ;  also  7o  take! 
powers,   rights,   privileges,   and   other   fiduciary  relations,  new  court  and  ^private 

11"  't  1_  *.    *-!_        M.'  C   trusts,  etc.,  subject 

appointments  and  business  it  may  have  at  the  time  or  to  requirements  and 
becoming  such  trust  company  member,  and  also  to  take,  i'^Act.'""'  '"P""* 
execute  and  administer  all  new  court  and  private  trusts 
as  defined  in  said  bank  act,  including  the  right  to  the 
appointment  of  all  fiduciary  capacities  in  which  it  may 
be  named  in  wills  theretofore  and  thereafter  executed 
and  probated,  and  other  appointments,  powers,  priv- 
ileges and  business,  of  every  kind  and  nature,  as  may  be 
then  or  thereafter  permitted  to,  but  subject  to  the  same 
requirements  and  limitations  as  may  be  imposed  upon 
any  corporation  under  all  of  the  provisions  of  the  bank 
act. 

To  hold,  administer,  execute,  and  in  all  respects  gen-  c-enerai  powers  of 

.  .  ,  trust  company. 

erally  handle,  manage  and  dispose  of,  without  charge, 
restriction,  limitation  or  impairment  of  any  nature,  all  of 
its  investments,  rights,  interests,  titles  to  property,  con- 
tractual, legal  and  other  rights,  obligations  or  liabilities, 
of  every  kind  or  nature,  court  and  private  trusts  as  de- 
fined in  the  bank  act,  and  other  powers  which  it  may  be 
then  permitted  to  exercise  by  law. 

A  foreifirn  corporation  may  be  authorized  to  act  in  this  Powers  of  foreign 

=*  ^  "^  cornoration  acting 

state  as  trustee  for  the  following  purposes :  «  state  as 

trustee. 

(1)  To  deliver  bonds,  and  receive  payment  therefor. 

(2)  To    deliver    permanent    bonds    in    exchange    for 
temporary  bonds  of  the  ssune  issue. 

II291 


§  90-92  BLYTH,  WITTER  &   CO. 

(3)  To  deliver  refunding  bonds  in  exchange  for  those 
of  a  prior  issue  or  issues. 

(4)  To  register  bonds,  or  to  exchange  registered 
bonds  for  coupon  bonds,  or  coupon  bonds  for  registered 
bonds. 

(5)  To  pay  interest  on  such  bonds,  and  to  take  up 
and  cancel  coupons  representing  such  interest  payments. 

(6)  To  redeem  and  cancel  bonds  when  called  for  re- 
demption, or  to  pay  and  cancel  bonds  when  due. 

(7)  The  certification  of  registered  bonds  for  the  pur- 
pose of  exchanging  registered  bonds  for  coupon  bonds. 

(8)  To  act  as  trustee  under  any  mortgage,  deed  of 
trust,  or  other  instrument  securing  notes  or  bonds  issued 
by  any  corporation. 

[Publishers'  note,  re  Section  90,  as  amended  1921: 

This  section  is  amended  only  in  minor  particulars,  so  as  to  eliminate  the 
present  responsibility  resting  upon  the  attorney  for  a  trust  company,  for  the  activ- 
ities of  such  company.  The  amendment  is  regarded  as  vital  in  its  consequences,  as 
involving  possibly  the  subrogation  of  responsibility  of  a  trust  company  to  one  of 
its  officers.] 

Section   9 1 .      Any    court   having    jurisdiction    of    any 

Court  may  authorize  ,       .     .  i .  .  .  j 

trustee  or  other  executor,  aaministrator,  guardian,  assignee,  receiver,  de- 

flduciary  to  deposit  ,  , .         .  ,  . 

trust  fund  with  trust  positary   or   trustee,    upon    the   application    or   any   such 

company,  subject  to  i  i  •         •  f 

court  order,  omcer  or  trustec,  or  upon  the  application  or  any  person 
having  an  interest  in  the  estate  or  property  administered 
by  such  officer  or  trustee,  after  such  notice  to  the  other 
parties  in  interest  as  the  court  may  direct,  and  after  a 
hearing  upon  such  application,  may  authorize  such  officer 
or  trustee  to  deposit  any  moneys  then  in  his  hands,  or 
which  may  come  into  his  hands  thereafter,  until  the  fur- 
ther order  of  said  court,  with  any  such  trust  company, 
and  upon  deposit  of  such  money,  and  its  receipt  and  ac- 
ceptance by  such  trust  company,  the  said  officer  or  trustee 
shall  be  discharged  from  further  care  or  responsibility 
therefor.  Such  deposit  shall  be  paid  out  only  upon  the 
order  of  said  court. 
Public  administrator       Section   92.      Any   public   administrator  may   deposit 

may  deposit  estate  '' 

funcs  noT  required  ^^y  qj.  ^H  moncys  of  any  cstatc  upon  which  he  is  ad- 

for  current  expenses  •' 

with  such  trust  ministering,  not  required  for  the  current  expenses  of  such 

company.  ^ 

[130] 


TRUST  COMPANIES  §  92-93 

administration,   with  any  such  trust  company  authorized 

to  transact  business  in  the  county,   or  city  and  county  in  ^°"''*  f^7  ?"*'=* 

■^  -^  ■'  such  aaministrator 

which  he  is  acting  as  such  administrator.     Any  court  hav-  *°.  ™*J^*  ^^p"*'* 

"^  ■'  wltn  truat  company. 

ing  jurisdiction  of  an  estate  being  administered  by  a  pub- 
He  administrator,  may  direct  such  administrator  to  deposit 
all  or  any  part  of  the  moneys  of  said  estate  w^ith  any  such 
trust  company.  Such  deposit  shall  relieve  the  public  ad- 
ministrator from  depositing  w^ith  the  county  treasurer  the 
moneys  so  deposited  with  such  trust  company.  Moneys 
so   deposited   by  a   public  administrator  may  be  drawn,  How  such  deposit 

may  be  withdrawn. 

upon  the  order  of  such  administrator,  countersigned  by  a 
judge  of  the  superior  court,  when  required  for  the  pur- 
poses of  administration,  or  otherwise. 

[Publishers'  note,  re  Section  92  as  amended  1921: 

Amendment,  for  the  clause,  in  line  four  of  this  section  «f  the  old  act  referring 
to  a  trust  company  "having  its  principal  place  of  business  in  the  county  or  city  and 
county"  substitutes  the  phrase  "authorized  to  transact  business  in  the  county  or 
city  and  county."] 

Section   93.       Any    court    having    jurisdiction    of    any  court  may  order 

-        ■       .     .  .  ,  1      fiduciaries  to  de- 

estate  m  process  or  administration,  or  any  other  proceed-  posit  trust  funds, 

,.         .  ,  .  1     1_  •         etc.,  with  trust 

ing,  may,  on  application  or  any  person  interested  therein,  company. 
or  the  person  who  has  been  selected  by  said  court,  or  a 
judge  thereof  as  executor,  administrator,  guardian,  as- 
signee, receiver,  depositary  or  trustee,  after  such  notice 
to  the  parties  in  interest  as  the  court  shall  direct,  or  with- 
out notice  if  all  parties  in  interest  consent  thereto,  and  a 
hearing  on  such  application,  order  any  executor,  adminis- 
trator, guardian,  assignee,  receiver,  depositary  or  trustee 
so  selected  or  appointed,  whether  such  person  has  duly 
qualified  or  not  to  deposit  with  any  such  trust  company, 
for  safe-keeping,  such  portion  or  all  of  the  personal  assets 

.  Effect  of  such 

of  said  estate  as  the  court  shall  deem  proper,  and  upon  deposit. 
such  deposit  being  made,  the  court  shall  by  an  order  of 
record  reduce  the  bond  to  be  given  or  theretofore  given 
by  such  officer  or  trustee,  so  as  to  cover  only  the  estate 
remaining  in  the  hands  of  said  officer  or  trustee;  and  the 
property  so  deposited  shall  thereupon  be  held  by  such 
trust  company,  under  the  order  and  direction  of  said 
court. 

[131] 


§  94-96  BLYTH.  WITTER  &  CO. 

Trust  company  not       Scction   94.     Such  trust  Company  shall  not  be  required 
renuire    o^v^  ^^  give  any  bond  or  security  in  case  of  any  appointment 
or  deposit  of  moneys  or  other  personal  assets  hereinbe- 
fore provided  for,  except  as  provided  in  this  act,  but  shall 
Trust  company  re-  be  responsible  f  or  all  investments  which  shall  be  made  by 
sponsible  for  invest-  .^  ^j  ^^^  ^^j^  ^j^j^j^  ^^^  ^^  entrusted  to  it  for  invest- 
ment by  such  court,  and  shall  be  liable  to  the  same  ex- 
tent as  an  individual,  and  as  hereinafter  provided. 

Trust  company  to       Section   95.      Such    trust   company   shall    pay   interest 

pay  interest^on  trust  ^^^^  ^jj  moneys  SO  deposited  with  it  at  such  rate  as  may 

be  agreed  upon  at  the  time  of  its  acceptance  of  any  such 

deposit,  or  as  shall  be  provided  by  the  order  of  court  and 

agreed  to  by  such  trust  company. 

Trust  company,  in       Section   96.     Any  such  trust  company,  if  its  principal 

*^'^''not^e°xc''ee'ding  place  of  business  is  situated  in  a  city  the  population  of 

deposits  with  stlte  which  does  not  exceed  one  hundred  thousand  persons, 

Treasurer  to  secure  ,       •  .  .  •     ^  ».  J  :».     ^k^ll 

performance  of  its  before  acccptmg  any  such  appomtment  or  deposit,  snau 
"'^  *'  deposit  with  the  state  treasurer,   as  herein  provided,   at 
least   fifty  thousand   dollars  as   security   for   the   faithful 
performance  and  execution  of  all  court  trusts  accepted 
by  it,   and  shall  also  deposit  with  the  state  treasurer  at 
least  fifty   thousand   dollars   as   security   for   the   faithful 
performance  and  execution  of  all  private  trusts  accepted 
As  to  making  first  by  it;  and  whenever  any  such  trust  company  shall  under 
*"'undM  s^? 98."  the  provisions  of  section  ninety-eight  of  this  act  be  re- 
quired to  make  the  first  additional  deposit  of  securities 
with   the  state   treasurer   such   trust   company  must   also 
deposit  with  the  state  treasurer  an  additional  fifty  thou- 
sand dollars  as  security  for  the  faithful  performance  and 
execution  of  all  private  trusts  accepted  by  it;  and  any 
^y*orp"puS'ion  t*""8t  company  if  its  principal  place  of  business  is  situated 
To^mlkf  deJo°sUs  ^^  a  city  the  population  of  which  exceeds  one  hundred 
"^'to  fecure^perfo"™-  thousand    persons,    before   accepting   any   such   appoint- 
ance  of  its  trusts,  ^^e^t  or  deposit,  shall  deposit  with  the  state  treasurer,  as 
herein  provided,  at  least  one  hundred  thousand  dollars, 
as  security  for  the  faithful  performance  and  execution  of 

[1321 


TRUST  COMPANIES  §  96 


all  court  trusts  accepted  by  it,  and  shall  also  deposit  with 

the  state  treasurer  at  least  one  hundred  thousand  dollars 

as   security   for   the    faithful    performance   and    execution 

of  all  private  trusts  accepted  by  it.      Any  such  deposit  Pcposit  to  consist  of 

may  be  made  either  in  lawful  money  of  the  United  States,  classes  of  securities: 

or  in  securities  of  either  or  any  of  the  following  classes: 

(a)  Bonds  issued  by  the  United  States  or  by  this  state  (a)  Bonds  issued  by 

,  .  ,  .  l_        1    J*   !„•    1.   ^'  ^'  °^  ^y  state,  or 

or  by  any  county,  city  and  county,  city  or  school  district  specified  subdivisions 
of  this  state,  or  bonds  of  any  irrigation  district  such  as 
are  legsd  for  investment  by  savings  banks; 

(b)  Bonds  for  the  payment  of  which  the  faith  and  (b)  Bonds  for  pay- 

111      nient  of  which  credit 

credit  of  the  United  States  or  of  this  state  are  pledged ;  of  u.  s.  or  of  state 

is  pledged. 

(c)  Notes  or  bonds  secured  by  mortgage  or  deed  of  (c)  Notes  or  bonds 

,,  /»i»  •  ij  J       M.'  secured  by  mortgage 

trust  constituting  a  first  lien  on  improved  and  productive  on  improved  cai. 
real  estate  in  the  State  of  California;  such  improved  real 
estate  being  worth  at  least  double  the  amount  of  such 
lien; 

(d)  Notes  or  bonds  secured  by  mortgage  or  deed  of  (d)  Notes  or  bonds 
trust,  payment  of  which  is  gueu-anteed  by  a  policy  of  o^dled  of  t"ust,^*^* 
mortgage  insurance,  and  mortgage  participation   certifi-  gul^n°ee°d  Z  ^'^ 
cates,  issued  by  a  mortgage  insurance  company  in  accord-  ^^^'^' 

ance  with  the  provisions  of  Chapter  VIII  of  Title  II  of 
Part  IV  of  division  first  of  the  Civil  Code;  provided, 
that  such  notes  or  bonds  shall  constitute,  and  such  mort- 
gage participation  certificates  shall  evidence  the  owner- 
ship of,  or  participation  in,  notes  or  bonds  which  con- 
stitute, a  first  lien  on  improved  and  productive  read  estate 
in  the  State  of  California,  such  improved  real  estate  being 
worth  at  least  double  the  amount  of  such  lien. 

Such  money  or  securities  shall  be  first  approved  by  the  such  money  or 

•'  1  •  •  1  1         securities  to  be 

superintendent  of  banks  and,  upon  his  written  order,  de-  first  approved  by 

<•  1  •  Swpt. 

posited  with  the  state  treasurer  for  the  respective  pur- 
poses herein  specified,  and  said  treasurer  shall  give  his 
receipt  therefor,  and  thereafter,  subject  to  the  provisions 

[1331 


§  96-97  BLYTH,  WITTER  &  CO. 

state  Treasurer  to  of  this  act,  shall  hold  such  deposits  of  moncy  or  securities 
lately,  for°i>en6*w  of  Separately,  each  for  the  sole  benefit  of  the  beneficiaries 
'"***'  *  "■  of  the  class  of  trust  business,  for  the  security  and  protec- 
tion of  which  the  same  was  deposited,  and  said  treasurer 
shall  fi^ve  his  receipt  therefor  and  the  state  shall  be  re- 
sponsible for  the  custody  and  safe  return  of  any  money 
Securities  may,  with  <M"  securities  SO  deposited.     Said  securities  or  money  so 
be  wUhdra°^^or^ei.  deposited  may  with  the  approval  of  the  superintendent 
changed,  ^f  banks,  be  withdrawn  or  exchanged  from  time  to  time 
for  other  like  securities,  or  lawful  money,  receivable  as 
Trust  company  to  re-  af  oresaid,  and  so  long  as  the  trust  company  so  deposit- 
dividlndfors'ecSrii  ing  Said  money  or  securities  shall  continue  solvent,  it  shall 
ties  deposited.  ^^^^  ^^  ^j^j^^  ^ j  ^j^^jj  ^^  permitted  by  the  state  treas- 
urer to  receive  the  interest  and  dividends  on  any  securities 
so  deposited.     Said  securities  and  money  shall  be  subject 
Said  securities  and  '<>  Sale  and  transfer,  and  to  the  disposal  of  the  proceeds 
sai^Transfer^etc!?  by  Said  State  treasurer,  only  on  the  order  of  a  court  of 
Vrder.  Competent  jurisdiction  and  for  the  benefit  respectively 
of  the  beneficiaries  of  that  class  of  trust  business  for  the 
security  and  protection  of  which  the  same  were  deposited. 

■WTien  trust  com-       SectioH   97.    Any  such  trust  company,  having  a  capital 

pany  having  capital  i  i        i       i  i      i     ii 

and  surplus  of  and   surplus   ot   two   hundred   thousand   dollars   or   more 

$200,000  or  more 

apportioned  as  apportioned   and    set   aside   as   security   for    the    faithful 

security  for  perform- 
ance of  court  trusts  performance  and  execution   of  all  court  trusts  accepted 

may  oe  permitted  *^  ^ 

gage"it8  bnsTnwi  ^^  '*^'  ^^  provided  in  this  act,  and  which  is  wholly  or  in 
TreMurer,*as^part  P^^'  invested  in  the  lot  and  building  in  which  its  business 
eposi .  jg  carried  on,  may  be  permitted  by  the  superintendent  of 
banks  to  mortgage  such  lot  and  building  to  the  state 
treasurer  for  such  sum,  up  to  its  full  market  value,  as  the 
superintendent  of  banks  may  determine,  and  such  mort- 
gage may  be  deposited  with  said  treasurer,  and  when  so 
deposited  it  shall  be  included  in  the  amount  of  securities 
herein  required  to  be  deposited  with  said  treasurer  as 
security  for  the  faithful  performance  of  all  such  court 
trusts. 

[134] 


TRUST  COMPANIES §  98 

Section   98.     Whenever  any  trust  company,  the  prin-  Trust  company  in 

city  of  population 

cipal  place  of  business  of  which  Is  located  in  a  city  the  not  exceeding  100,000 

•^  *^  receiving:  from  court 

population  of  which  does  not  exceed  one  hundred  thou-  trusts  trust  funds, 

'^     *^  ^  1    1  •       *°  notify  Supt.  and 

sand  persons,  receives  from  court  trusts  accepted  by  it,  to  deposit  addi- 

^  !•    /-  1  tional  security  with 

trust  funds,  as  herein  defined,  to  the  amount  of  five  hun-  state  Treasurer,  to 

'  .  .  .-       .  .   .  be  held  for  benefit 

dred  thousand  dollars,  it  shall  forthwith  notify  in  writing  of  the  beneficiaries. 
the   superintendent   of   banks   of   such   fact,    and   within 
thirty  days  thereafter  shall  deposit  with  the  state  treasurer 
additional  money  or  securities  of  the  character  mentioned 
and  defined  in  section  ninety-six  of  this  act,  approved  as 
therein  provided,  in  the  amount  of  fifty  thousand  dollars; 
and   whenever  any  trust   company   receives   from   court 
trusts  such  funds  to  the  amount  of  one  million  dollars  it 
shall  further  notify  in  writing  the  superintendent  of  banks 
of  such  fact  and  within  thirty  days  thereafter  shall  de- 
posit with  the  state  treasurer  additional  money  or  securi- 
ties of  the  character  mentioned  and  defined  in  section 
ninety-six  of  thb  act,  approved  as  therein  provided,  in 
the  amount  of  fifty  thousand  dollars;  and  for  each  addi- 
tional five  hundred  thousand  dollars  of  such  trust  funds 
thereafter   received    by   any   trust   company   from   court 
trusts  a  similar  notification  in  writing  shall  forthwith  be 
given  to  the  superintendent  of  banks,  and  a  further  de- 
posit in  the  amount  of  twenty-five  thousand  dollaurs  of 
such  money  or  securities,  or  of  securities  provided  for  in 
section  ninety-seven  of  this  act  likewise  approved,  shsdl 
be   made,   within   thirty   days   thereafter,    by   such   trust 
company   with   said   state   treasurer,    until    five   hundred 
thousand    dollars   of   such   securities   have   been    so    de- 
posited.     The   treasurer   shall   give   his   receipt   for   any 
money  or  securities  so  deposited  and  each  and  sJl  of  such 
deposits  of  money  or  securities,  shall  be  held  by  said  state 
treasurer  for  the  sole  benefit  of  the  beneficiaries  of  the 
class  of  business  for  the  security  and  protection  of  which 
same  were  deposited.     The  state  shall  be  responsible  for  Q^^^^  ^^  ^^  respon- 
the  custody  and  safe  return  of  any  money  or  securities  so  deposits.""*' 
deposited   with  said   state   treasurer.      The   term    "trust 

[135] 


§  98  BLYTH,  WITTER  &  CO. 


"Trust  funds"  funds"  when  used  in  this  section  shall  be  deemed  to  mean 
and  shall  mean  personal  property  and  cash,  whether  re- 
ceived with  the  original  trust  property  or  as  rent,  income 
or  proceeds  thereof,  or  otherwise,  in  connection  with  the 
trust,  and  shall  not  be  deemed  to  include  and  shall  not 
Trust  company  fail-  include  real  property.    Any  trust  company  failing  to  com- 
sec.  to  forfeit  $100  ply  with  the  provisious  of  this  section  shall  forfeit  to  the 
State  of  California  one  hundred  dollars  a  day  for  each 
day  during  which  such  failure  or  default  shall  continue. 
Upon  making  a  request  in  writing  to  the  superintendent 
of  banks,   any  such  trust  company  shall  be  entitled  to 
Trust  company  withdraw  from  the  state  treasurer,  from  time  to  time,  a 

may  withdraw  from 

State  Treasurer  sufSicient  amount  of  such  securities  so  that  at  all  times  the 

securities  in  ex- 
cess of  requirements  amount  of  such  sccurities  so  deposited  shall  conform  to 

the  requirements  of  this  act,  and  so  that  at  no  time  shzul 
such  trust  company  be  required  to  have  on  deposit  with 
the  state  treasurer  an  amount  of  securities  in  excess  of 
the  requirements  of  this  act.  Upon  receiving  such  re- 
quest in  writing,  and  satisfactory  proof  of  the  facts  war- 
ranting such  withdrawal,  it  shall  be  the  duty  of  the  sup- 
erintendent of  banks  to  forthwith  deliver  to  the  state 
treasurer  a  written  order  directing  the  withdrawal  of  said 
securities  so  as  to  conform  with  the  provisions  of  this 
section,  and  it  shall  be  the  duty  of  the  state  treasurer  to 
Validity  of  acts  or  Comply  with  such  Written  order.  The  validity  or  legality 
crrprnyTot  a'ffectel  of  any  act  or  proceeding  done  or  taken  by  any  such 
^^  "of trust^comp^ny  trust  Company,  relating  to  or  in  connection  with  the  ad- 
Act,  etc.  ministration  of  any  such  trusts,  shall  not  be  affected  or 
impaired  by  the  neglect  or  failure  of  such  trust  company, 
or  of  any  officer  or  employee  thereof,  to  comply  with 
any  of  the  provisions  of  this  act,  but  all  such  acts  and 
proceedings  done  or  taken  prior  to  the  revocation  of  its 
certificate  of  authority  to  do  such  business  by  the  super- 
intendent of  banks,  under  the  provisions  of  this  act,  or 
the  revocation  by  any  court  or  judge  thereof  of  the  ap- 
pointment,  order  or  decree  theretofore  entered  in  such 

1136] 


TRUST  COMPANIES  §98-101 


trust  matter  shall  be  as  valid  and  effective  for  all  pur- 
poses as  if  any  such  neglect  or  failure  had  not  occurred. 

Section   99.      When  any  part  of  the  securities  so  de-  Requirements  when 

.  f.  1_         J      P*''*  °^  deposit  con- 

posited  with  the  state  treasurer  consists  or  notes  or  bonds  gists  of  notes,  bonds 

,,-  -LnL  "■■  participation 

secured  by  mortgage  or  deed  or  trust,  it  shall  be  accom-  certificates  secured 

.      11  .  f      •   1       •  .-c       i  1.       1.1-  by  mortgage,  etc. 

panied  by  a  registrar  of  titles  certihcates  as  to  the  con- 
dition of  the  title  if  the  notes  or  bonds  are  secured  by 
mortgages  covering  property  which  has  been  brought 
under  the  operation  of  the  land  title  law,  commonly 
called  the  Torrens  title  law,  or  a  policy  of  mortgage  in- 
surance, or  a  complete  abstract  of  title  or  an  unlimited 
certificate  of  title  or  a  policy  of  title  insurance  prepared 
or  issued  by  a  person,  company  or  corporation  desig- 
nated or  approved  by  the  superintendent  of  banks  and 
authorized  by  law  or  otherwise  found  by  the  superin- 
tendent of  banks  to  be  competent  to  issue  such  evidence  Abstracts  of  title 

ana  insurance 

of  title,   which  shall  be  examined  and  approved  by  or  policies  to  be  ex- 

'  amined  and  approved 

under  the  direction  of  said  superintendent  of  banks.  The  by  supt. 
fees  for  an  examination  of  such  evidence  of  title  by 
council  to  be  paid  by  the  trust  company  making  the  de- 
posit shall  not  exceed  twenty  dollars  for  each  title  ex-  Fees. 
amined,  and  the  fee  for  each  appraiser  not  exceeding 
two,  shall  not  exceed  five  dollars  for  each  mortgage  or 
deed  of  trust. 

(Section  100.     Repealed  1913.) 

Section    101.      For  the  purposes  of  this  act,  all  trusts  classification  of 

,  trusts. 

permitted  to  be  accepted  or  executed  by  any  such  trust 
company,  under  any  provision  of  this  act  are  hereby  clas- 
sified and  defined  as  either: 

(a)  Court  trusts;  or 

(b)  Private  trusts. 

A  court  trust  is  one  in  which  any  such  trust  company  "Court  trust" 

,  I  £  .      defined. 

acts  under  appointment,  order  or  decree  ot  any  court, 
as  executor,  administrator,  guardian,  assignee,  receiver, 
depositary  or  trustee,  or  in  which  it  receives  on  deposit 

[137] 


§101  BLYTH,  WITTER  &   CO. 

from  a  public  administrator,  under  any  provision  of  this 
act,  or  from  any  executor,  administrator,  guardian,  as- 
signee, receiver,  depositary  or  trustee,  under  any  order 
or  decree  of  any  court,  money  or  property. 

"Private trust"       Any  Other  trust  is  a  private  trust;  provided,  that  the 

defined,  .  .  r        i   •    i 

creator  or  any  private  trust  or  which   a   trust  company 

shall  be  made,   or  at  any  time  come  to  be,   the  trustee, 

How  private  trust  may,    at  the   time   of   the   creation    of   such   trust   or   the 

may  be  subjected  .  /■  i  •        ^       ^         ^  1_  •  •       • 

to  provisions  of  Creator  or  any  such  private  trust,  or  his  successors  in  in- 
to court  trust's!  terest,  and  the  beneficiaries  thereof  may,  at  any  time,  by 
their  joint  consent,  direct  that  such  trust  shall  be  subject 
to  and  entitled  to  the  benefit  of  all  of  the  provisions  of 
this  act  relating  to  court  trusts  and  thereafter  such  trust 
shall  for  all  the  purposes  of  this  act  be  deemed  to  be  a 
court  trust  and  wherever  in  this  act  the  words  "court 
trust"  are  used  they  shall  be  deemed  to  include  private 
trusts  which  are  subject  to  supervision  except  in  so  far  as 
any  of  the  provisions  of  this  act  relating  to  court  trusts 
may,  by  their  nature,  be  inapplicable  to  such  private 
trust.  Such  direction  shall  be  in  writing  addressed  to  the 
trustee  and  a  copy  thereof,  certified  by  the  trustee,  de- 
livered to  the  superintendent  of  banks. 

Inspection  and  super-       jj^  ^ase  such  direction  shall  be  made  after  the  accept- 

vision  by  Supt. 

covers  court  trusts,  ance  of  the  trust,  the  trustee  shall  have  the  right  to  resign 

also  private  trusts 

when  subjected  to  as  such  and  a  new  trustee  shall  be  appointed  as  provided 

Act. 

in  the  trust  instrument  or  by  law.  The  inspection  and 
supervision  of  the  superintendent  of  banks  shall  extend 
only  to  court  trusts  as  herein  defined  and  to  private  trusts 
subjected  to  the  provisions  of  this  act  relating  to  court 
trusts  as  above  provided;  except,  that  the  superintendent 
of  banks,  his  attorneys,  examiners  or  other  assistants  may, 
in  the  examination  of  the  bank,  inspect  and  inquire  into 
any  private  trust  or  trusts  administered  by  such  bank. 

Private  trusts,  ex-       Private  trusts,  except  as  in  this  section  provided,  shall 

cept  as  in  Sec.  pro-  i  i    .  i  •  •  •    •  £       1. 

vi^ed,  not  subject  to  not  be   subject   to   the   inspection   or  supervision   or   the 

supervision  of  Supt. 

11381 


TRUST  COMPANIES §  101-102 

superintendent  of  banks,  his  attorneys,  examiners  or  other 
assistants. 

In  making  the  reports  to  the  superintendent  of  banks  Jjj^'^^ti^"™''' 
required  by  this  act,  every  trust  company  shall,  in  addi-  f "g'^^^figd" inTorma- 
tion  to  the  other  facts  to  be  reported  by  it,  furnish  only  tru"stran°d'private* 
a  list  and  brief  description  of  the  court  trusts  and  private  trusts  subject  to 

^  supervision. 

trusts,  which  are  subject  to  supervision,  held  by  it,  the 
source  of  appointment  thereto,  the  authority  by  which 
the  appointment  or  deposit  was  made,  and  the  amount 
of  real  or  personal  property  held  by  such  trust  company 
by  virtue  thereof. 

Nothing  in  this  act  contained  shall  make  it  unlawful  for  whon  person  or  cor- 

^  _  _  .    .  poration.  not  a  trust 

any  person  or  corporation  not  subject  to  the  supervision  company,  may  hold 

•^  .11.  money  in  escrow  or 

of  the  superintendent  of  banks  to  engage  in  the  business  act  as  trustee. 
of  receiving  and  holding  in  escrow  money  or  its  equiva- 
lent pending  investment  in  real  estate  or  securities  for  or 
on  account  of  his  or  its  principal,  or  of  acting  as  trustee 
under  deeds  of  trust  given  solely  for  the  purpose  of 
securing  obligations  for  the  repayment  of  money,  other 
than  corporation  bonds. 

[Publishers'  note,  re  Section  101,  as  amended  1921: 

Section  101  has  been  amended  with  respect  to  private  trusts,  providing  that  the 
superintendent  of  banks,  his  attorneys,  examiners  and  other  assistants,  may,  in  the 
examination  of  the  bank,  inquire  into  any  private  trust  or  trusts  administered  by 
such  bank,] 

Section    102.     Any  corporation  which  desires  to  with-  ynon  corporation 

■'  ^  aesiring  to  aiscon- 

draw  from  and  discontinue  doing  a  trust  business  shall  continue  trust  busi- 

ness,  snowing 

furnish  to  the  superintendent  of  banks  satisfactory  evi-  ^jj  „\^i[|^t-^^^and 
dence  of  its  release  and  discharge  from  all  the  obligations  trusts,  supt.  shall 

"  1  evoke  certinoate 

and  trusts  hereinbefore  provided  for,  and  thereupon  the  of  authority  to  do 

trust  business,  etc. 

superintendent  of  banks  shall  revoke  his  certificate  of 
authority  to  do  a  trust  business  theretofore  issued  to  such 
corporation,  and  the  state  treasurer  shall  return  to  said 
corporation  all  the  securities  deposited  by  such  corpora- 
tion and  shall  cancel  any  mortgage  made  by  such  cor- 
poration to  said  state  treasurer  as  a  part  of  such  securities, 
and  thereafter  such  corporation  shall  not  be  permitted 
to  use  and  shall  not  use  the  word  "trust"  in  its  corporate 
name  or  in  connection  with  its  business. 

[139] 


§  103-106  BLYTH,  WITTER  &  CO. 

Private  trusts  Scctioii  103.  Any  trust  Company  exercising  the  pow- 
ers and  performing  the  duties  provided  for  in  this  act, 
shall,  except  as  herein  otherwise  provided,  keep  inviolate 
all  communications  and  writings  made  to  or  by  said 
trustee  touching  the  existence,  condition,  management 
and  administration  of  any  private  trust  confided  to  it; 
and  no  creditor  or  stockholder  of  any  such  trust  company 
shall  be  entitled  to  disclosure  or  knowledge  of  any  such 
Who  entitled  to  communication  or  writing ;  provided,  however,  that  the 
now  e  ^®^°^^^^'^'  president,  vice-president,  manager,  trust  officer,  secretary 
or  regularly  employed  attorney  of  any  such  trust  com- 
pany shall  be  entitled  to  knowledge  of  any  such  com- 
munication or  writing;  and  provided  further,  that  in  any 
suit  or  proceeding  touching  the  existence,  condition,  man- 
agement or  administration  of  any  such  trust,  the  court 
wherein  the  same  is  pending  may  require  disclosure  of 
any  such  communication  or  writing. 

(Section    104.      Repealed    1913.) 

^°'Tarsurp°usand  Scction  105.  Evcry  trust  company  shall,  except  as 
trust  finds  ^^y  trust  otherwise  provided  by  law,  invest  its  capital  and  surplus 
and  any  trust  funds  received  by  it  in  connection  with  its 
trust  business,  in  accordance  with  the  laws  relative  to  the 
investment  or  loan  of  funds  deposited  with  savings  banks, 
unless  a  specific  agreement  to  the  contrary  b  made  be- 
tween the  trust  company  and  the  party  creating  the  trust, 
or  unless  it  is  otherwise  ordered  by  the  court,  in  connec- 
tion with  any  court  trust. 

^'do^drrrtme^nt*!       Section    1  06.     Any  such  trust  company  desiring  to  do, 
business  also,  must  or  doing,    a  Commercial  banking  business   or   a   savings 

have  capital  specified  ^  /^  ° 

by  Sec.  23.  bank  business,  or  both,  in  addition  to  its  trust  business 
shall  have  actually  paid  up,  in  cash,  the  amount  of  capital 
provided  in  section  twenty-three  of  this  act. 

tituTn^ii^a'^cf com^       ^^^  ^^^^^  insurance  company  authorized  by  its  articles 
pany  authorized_to^do  ^f  incorporation  to  do,  or  doing  a  trust  business,  in  addi- 
tion to  its  title  insurance  business,  shall  comply  w^ith  all 

[140] 


TRUST  COMPANIES §  106-107 

the  requirements  of  any  law  governing  trust  companies, 
and  shall  have  a  capital  stock  actually  paid  in,  in  cash,  of 
not  less  than  two  hundred  thousand  dollars,  and  in  ad- 
dition thereto,  the  capital  stock  required  by  law  for  doing 
a  title  insurance  business.  Such  capital  for  each  such  de- 
partment or  class  of  business  shall  be  increased  from 
time  to  time  in  the  same  manner  and  to  the  same  extent 
as  though  each  such  department  or  class  of  business  was 
conducted  by  a  separate  bank,  trust  company  or  title  JiUe^nTJ^anrjc^om- 
insurance  company,   instead  of  as  separate  departments  m^enui^bufinefs^to 

If  1         •  A  M.         M.  J  i.*».l_   comply  with  depart- 

asses  of  busmess.     Any  trust  company  and  any  title  cental  provisions 

insurance  company  doing  a  departmental  business  as  "  c  ,  e  c. 
above  provided  shall  comply  with  the  provisions  of  this 
act  governing  each  of  such  departments  and  with  the 
provisions  of  any  law  governing  each  such  class  of  busi- 
ness as  to  its  deposits,  reserve,  surplus,  investments  and 
loans. 

Section    107.     Any  corporation  doing  a  departmental  ^°pP°[^,\'°t^f°'°*^ 
business  as  a  title  insurance  company  and  as  a  trust  com-  ^^|'"^^  ^and 'iw 
pany,  shall,  as  to  its  trust  department,  be  subject  to  the  Co.— Provisions 

r        J  '  '  »  governing. 

supervision  and  inspection  of  the  superintendent  of 
banks,  and  as  to  its  trust  department  must  make  all  re- 
ports to  the  superintendent  of  banks  required  to  be  made 
by  trust  companies  by  the  provisions  of  this  act,  and  as 
to  its  trust  department  such  corporation  shall  also  be 
subject  to,  and  shall  have  the  benefit  of  all  other  pro- 
visions and  requirements  of  this  act  applicable  to  trust 
companies,  and  shall  also  be  subject  to  and  shall  have 
the  benefit  of  all  of  the  banking  laws  and  rules  and  regu-  ^^ g"t°/tg7/„*kin"* 
lations  of  the  banking  department  of  this  state  applicable  [^l^^^^oTp'rati^on. 
to  trust  companies.  The  proportionate  part  of  the  state  ***=• 
banking  fund  provided  for  by  section  one  hundred  and 
twenty-three  of  this  act,  that  shall  be  payable  by  such 
corporation,  shall  be  based  on  the  amount  of  capital  and 
surplus  of  such  corporation  apportioned  to  its  trust  de- 
partment. 

[Mil 


§  120-121  BLYTH,  WITTER  &  CO. 


ARTICLE  V. 

STATE  BANKING  DEPARTMENT. 


state  Banking  De-        Section    120.     There  is  hereby  Created  a  State  banking 

partment  created. 
Superintendent's 
appointment,  tenure,  "  .  ,  rill  1.I- 

saiary,  oath  and  be  the  Superintendent  thereor,  and  be  known  as  the  sup- 


Superintendent's  department.      The  chief  officer  of  such  department  shall 

lointment,  tenure,  ,  riii  .1 


bond. 


erintendent  of  banks.  He  shall  be  appointed  by  the 
governor,  and  shall  hold  office  at  the  pleasure  of  the 
governor.  He  shall  not,  either  directly  or  indirectly,  be 
interested  in  any  commercial  bank,  savings  bank  or  trust 
company,  or  as  an  individual  banker.  He  shall  receive 
an  annual  salary  of  ten  thousand  dollars,  to  be  paid 
monthly  out  of  the  state  treasury  on  a  warrant  of  the 
controller.  He  shall,  within  fifteen  days  from  the  time 
of  notice  of  his  appointment,  take  and  subscribe  to  the 
constitutional  oath  of  office,  and  file  the  same  in  the  office 
of  the  secretary  of  state,  and  execute  to  the  people  of  the 
state  a  bond  in  the  penal  sum  of  fifty  thousand  dollars, 
with  corporate  surety  or  two  or  more  sureties  to  be  ap- 
proved by  the  governor  of  the  state,  conditioned  for  the 
faithful  discharge  of  the  duties  of  his  office. 

Superintendent  to       Section    121.     The  Superintendent  of  banks  shall  em- 

employ  assistants:  1        r      1  1  L  •  J 

Their  qualification,  ploy  a  chief  deputy,   attorney  and  such   examiners  and 

duties  and  compensa-  ,  ,  1  1  •      1  ■ 

tion.  other  assistants  as  he  may  need  to  discharge  in  a  proper 
manner  the  duties  imposed  upon  him  by  law,  none  of 
which  examiners  or  assistants  or  attorney  shall  be  in- 
terested in  any  bank  in  this  state  as  director,  stockholder, 
officer  or  employee,  and  they  shall  perform  such  duties 
as  he  shall  assign  to  them.  He  shall  fix  the  compensa- 
tion of  the  chief  deputy,  attorney,  examiners  and  other 
assistants,  which  compensation  shall  be  paid  monthly  on 
his  certificate  and  on  the  warrant  of  the  controller  out  of 
tioTof  SefTeputy."  the  State  treasury.  The  chief  deputy  shall  within  fifteen 
days  from  the  time  of  his  appointment  take  and  subscribe 
to  the  constitutional  oath  of  office  and  file  the  same  in 


142- 


STATE  BANKING  DEPARTMENT  §  121-123 

the  office  of  the  secretary  of  state.  No  person  shall  be 
appointed  a  chief  deputy  who  has  not  had  at  least  three 
years'  active  banking  experience,  either  as  an  executive 
officer  or  employee  of  some  bank  in  this  state.      In  case  During  absence  or 

fl  I  .        I    .].  •         \  rr  inability  of  Buper- 

the  absence  or  inability  to  act,  or  vacancy  in  the  ortice  intendent,  chief 

fl  .1  c     1  I  r  I    •  •  deputy  to  act,  upon 

the    superintendent    or    banks    tor    thirty    consecutive  giving  bond. 

days,  the  chief  deputy  shall  execute  to  the  people  of  the 
state  a  bond  in  the  penal  sum  of  fifty  thousand  dollars, 
with  corporate  surety  or  two  sureties  to  be  approved  by 
the  controller  and  treasurer  of  the  state,  conditioned  for 
the  faithful  discharge  of  the  duties  of  the  superintendent 
while  such  deputy  acts  as  superintendent,  and  upon  filing 
such  bond  such  deputy  shall  have  all  the  power  and 
duties  of  superintendent  of  banks,  until  the  inability  of 
the  superintendent  shall  be  removed,  or  until  a  new  sup- 
erintendent of  banks  shall  have  been  appointed  by  the 
governor.  No  superintendent  of  banks,  chief  deputy,  Superintendent, 
or  bank  examiner,   shall   be   or  shall   become   indebted,  examiner  not  to  be 

...  .      T  1  .  1  1  1  obligated  to  any 

directly    or    indirectly,     either    as     borrower,     endorser,  bank. 
surety,  or  guarantor,  to  any  bank  under  his  supervision  or 
subject  to  his  examination. 

Section    122.     The  superintendent  of  banks  shall  have  Offices  of  SupeHn- 

.        .        ■.        ff.  .         ,  .  foT—  •  1  tendent  in  San  Fran- 

his  principal  office  in  the  city  of  San  Francisco,  and  may  cisco  and  los  Angeles. 
also  have  suitable  rooms  in  the  city  of  Los  Angeles, 
wherein  to  conduct  the  business  of  the  state  banking 
department.  The  superintendent  shall,  from  time  to 
time,  obtain  the  necessary  furniture,  stationery,  fuel, 
lights,  and  other  proper  conveniences  for  the  transaction 
of  such  business;  the  expense  of  which  shall  be  paid  out 
of  the  state  treasury  on  the  certificate  of  the  superin- 
tendent and  the  warrant  of  the  controller. 

Section    123.      A  fund  is  hereby  created  to  be  known  state  banking  fund 

I  !!•  fl  1  f'lfjUUL       created,  out  of  which 

as  the  state  banking  fund,  and  out  or  said  rund  shall  be  expenses  of  banking 

.,       ,,      ,  .  -i.  II  1  Jt    department  to  be 

paid  all  the  expenses  incurred  in  and  about  the  conduct  paid. 
of  the  business  of  the  banking  department,  including  the 
salary  of  the  superintendent,  chief  deputy,  attorney,   ex- 

[143] 


§123  BLYTH,  WITTER  &  CO. 


Each  bank  to  pay  amincTS  and  Other  assistants,  traveling  expenses,  furnish- 
*°"ratiVharrof  ing  of  rooms  and  rent.     Each  bank  shall  pay  annually  its 
'        share  of  one  hundred  and  ten  thousand  dollars,  to  be  de- 
termined by  the  proportion  which  the  capital  and  surplus 
which  shall  include  all  reserve  and  contingent  funds,  of 
any  incorporated  bank  or  the  surplus,  reserve  and  con- 
tingent funds  of  any  bank   organized  without  a  capital 
stock  bear  to  the  capital,  surplus,  reserve  and  contingent 
funds  in  the  aggregate  of  all  such  banks  receiving  cer- 
tificates   of    authorization    from    the    superintendent    of 
banks,  as  shown  by  the  last  report  of  such  bank  to  the 
supt.  may,  at  dis-  superintendent  of  banks;  provided,  that  the  superintend- 

cretion,  collect  less  r   i         i  •  r  ^  J'tL 

sum,  if  same  suffi-  eut  of  banks  may,  in  any  hscal  year  and  in  trie  exercise 

cient  to  pay  ex-  ii  r  i     i  l  l  1- 

penses.  of  his  discretion,  collect  from  each  bank  a  less  sum  to  be 
determined  by  the  proportion  established  in  this  section, 
if  such  less  sum  be  sufficient  to  pay  all  the  expenses  in- 
curred in  and  about  the  conduct  of  the  business  of  the 
banking  department,   including  the  salary  of  the  super- 
intendent,  chief  deputy,    attorney,    examiners  and   other 
assistants,    traveling   expenses,    furnishing   of  rooms  and 
Control  and  disposi-  rent.      All  moncys  collected  or  received  by  the  superin- 
ing  fundi  tendent  of  banks,  under  and  by  virtue  of  the  provisions 
of  this  act,  shall  be  by  him  delivered  to  the  treasurer  of 
the  state,  who  shall  deposit  the  same  to  the  credit  of  said 
banking  fund,  and  the  unexpended  balance  of  all  moneys 
heretofore  paid  into  the  state  treasury  by  any  of  the  bank 
commissioners  or  the  superintendent  of  banks,   shall  be 
Supt.  may  retain  retained  and  become  a  part  of  said  fund ;  provided,  how- 

be^u Jed  as  revolving  ever,  that  the  superintendent  shall  have  authority  to  re- 
fund for  Dept.,  etc.        ..i.  .  iii-  iiil_  L 

tain  in  his  possession  and  under  his  control  the  sum  or 
two  thousand  dollars  to  be  used  by  him  as  a  revolving 
fund  for  the  benefit  of  the  state  banking  department  until 
the  end  of  the  fiscal  year,  at  which  time  he  shall  make 
Penalty  for  non-pay-  full  Settlement  with  the  treasurer  of  the  state.  If  any 
"""Vata^oTexpense:  such  bank  shall   fail   to  pay  such  charges  as  are  herein 

[144] 


STATE  BANKING  DEPARTMENT  §  123-124 


required,    the   superintendent   shall    forthwith    cancel    the 
certificate  of  said  bank. 

Section    124.      Every  bank   and   the   trust  department  Every  bank,  and 

f  .  I       .  ,     .  ,         .  trust  dept.  of  title 

or  every  title  insurance  company  doing  a  trust  business,  insurance  company 

•      III  |.  ,.  .  ..  .  I  f   doing  trust  business, 

shall  be  subject  to  the  inspection  or  the  superintendent  or  to  be  subject  to  in- 

banks.      The  superintendent  of  banks,   the  chief  deputy, 

or  some  competent  person  or  persons  to  be  appointed  by  supt.  or  other  ex- 

,  ■  1  f   1  I  II  •  aminers  as  specified, 

the  superintendent  or  banks,  to  be  known  as  examiners,  to  examine  every  bank 

I      II        ...  I  .  Ill  I      At  least  once  a  year. 

shall  visit  and  examine  every  bank  at  least  once  each 
fiscal  year.  On  every  such  examination  inquiries  shall  what  such  examin*- 
be  made  by  him  as  to  the  condition  and  resources  of 
the  bank,  the  mode  of  conducting  and  managing  its 
affairs,  the  action  of  its  directors,  the  investment  and  dis- 
position of  its  funds,  the  safety  and  prudence  of  its  man- 
agement, the  security  afforded  to  those  by  whom  its  en- 
gagements are  held  and  whether  the  requirements  of  its 
articles  of  incorporation  and  the  law  have  been  complied 
with  in  the  administration  of  its  affairs,  and  as  to  such 
other  matters  as  the  superintendent  may  prescribe. 
Whenever,    in    the    judgment    of    the    superintendent    of  supt.  may  make 

.  ..  ^.  extra  examinations 

banks,  the  condition  of  any  bank  renders  it  necessary  or  for  which  bank  shall 

,  .  .  I  pay  as  specified. 

expedient  to  make  an  extra  examination  or  to  devote  any 
extraordinary  attention  to  its  aflFairs  the  superintendent 
of  banks  shall  have  authority  to  make  any  and  all  neces- 
sary extra  examinations  and  to  devote  any  necessary 
extra  attention  to  the  conduct  of  its  affairs;  and  such 
bank  shall  pay  for  all  such  extra  services  rendered  by 
the  superintendent  of  banks  at  a  price  to  be  fixed  by  the 
superintendent  of  banks  but  not  to  exceed  twenty  dollars 
per  day  for  the  examination  of  the  principal  office  of  such 
bank  and  twenty  dollars  a  day  for  the  examination  of 
each  branch  office  of  each  bank.     The  superintendent  of  gupt.  may  examine 

bi  1      11        1  L  i  •  j._    l~~    California  agency 

anks  shall  also  have  power  to  examine,  or  cause  to  be  ^^  foreign  bank. 

examined,  every  agency  located  in  this  state  of  any  for- 
eign bank  or  banking  corporation,  for  the  purpose  of 
ascertaining  whether  it  has  complied  with  the  laws  of 
this  state,   and   for  such   other  purposes  and   as   to  such 

[145] 


§  124-126  BLYTH.  WITTER  &  CO. 

other  matters  as  the  superintendent  may  prescribe.    The 
On  examination  superintendent,    chief  deputy,   and  every  such  examiner 

Supt.  may  administer     .      n  .  i  ■,       .     . 

oath  and  compel  at-  shall  have  the  power  to  administer  an  oath  to  any  person 

tendance  of  wit-       .  .  .  .  .  .  .  c 

nesses.  whose  testimony  he  may  require  on  the  examination  or 
any  bank,  or  on  the  examination  of  any  agency  of  any 
foreign  bank  or  banking  corporation,  and  to  compel  ap- 
pearance and  attendance  of  any  such  person  for  the  pur- 
Examiner  to  report  posc  of  any  such  examination.     When  a  bank  shall  have 

doubtful  securities 

to  Supt.  been  examined  by  any  examiner,  and  he  finds  securities 
therein  which  are,  in  his  judgment,  of  doubtful  value, 
he  shall  report  the  same  to  the  superintendent  of  banks, 
who  thereupon  shall  be  authorized  to  employ  appraisers 
at  the  expense  of  such  bank  to  appraise  said  securities,  at 
a  compensation  to  be  fixed  by  the  superintendent  of 
Supt.  shall  provide  banks.      The    Superintendent   of   banks    shall,    whenever 

auditor,  at  bank  s 

expense,  when  hank  required  to  do  SO  by  any  bank,   provide  an  auditor  to 
make  an  audit  of  the  affairs  of  such  bank.      The  com- 
pensation  for   making   such  audit   shall   be   paid  by   the 
Supt.  not  to  examine  bank  direct  to  the     person  making  the  audit.      Nothing 

private  trust  or  title  »  =  ^ 

insurance  business,  herein  shall  be  deemed  to  authorize  or  require  the  sup- 

of  corporation  doinir  ^  ■^ 

trust  business,  erintendent  of  banks  to  inspect  or  supervise  the  private 
trust  business  or  title  insurance  business  of  any  corpora- 
tion doing  a  trust  business. 

Oath  of  examiners.  Section  125.  Every  examiner  appointed  by  the  sup- 
erintendent of  banks  shall,  before  entering  upon  the  dis- 
charge of  his  duties,  take  the  constitutional  oath  of  office 
and  cause  the  same  to  be  filed  in  the  office  of  the  secre- 

No  examiner  to  be  tary    of    State.       No    such    examiner    shall    be    appointed 

appointed  receiver 

01  bank  ex^ammi^d  receiver  of  any  bank  whose  books,  papers  and  affairs  he 
shall  have  examined  pursuant  to  his  appointment. 

Neglect  of  chief       Section    126.       If   the   chief    deputy   or    any    examiner 

deputy  or  examiner 

to  report  known  un-  shall  have  knowledge  of  the  insolvency  or  unsafe  condi- 

safe  conditions  "^ 

made  felony.  jJqj^  qJ  ^^y  ]-,ank  mentioned  in  this  act,  and  that  it  is 
unsafe  or  inexpedient  to  permit  said  bank  to  continue 
business,  and  shall  neglect  to  forthwith  report  such  fact 

[146] 


STATE  BANKING  DEPARTMENT  §  126-127 


in   writing   over   his  signature   to    the   superintendent    of 
banks,  he  shall  be  guilty  of  a  felony. 

Section    1  2  7.     When  any  number  of  persons  desire  to  written  consent  of 
organize  a  corporation  to  conduct  any  one  or  more  or  all  tollgrntlingT^^ 
of  the  businesses  mentioned  in  divisions    (a),    (b),   and  ^^^^' 
(c)    of  section  two  of  this  act  or  to  circulate  stock  sub- 
scription   lists    for    any    such    proposed    corporation    the 
previous  written  consent  of  the  superintendent  of  banks 
to   such   proposed    organization   must  be   obtained.      No  B^nk  must  have  a 
bank  shall  transact  any  business  in  this  state  without  the  boflr^/transacUng'''* 
written   approval    of   the   superintendent   of   banks,    and  ^""°«"- 
without  his  written  certificate  stating  that  it  has  complied 
with  the  provisions  of  this  act,  and  all  the  requirements 
of  law,  and  that  it  is  authorized  to  transact,  within  this 
state,  the  business  specified  therein ;  which  certificate  may  when  certiecato 
be  withheld  by  the  superintendent  of  banks  whenever  he  by  Sup^'t. 
has  reason  to  believe  that  the  bank  is  being  formed  for 
any  other  than  the  legitimate  objects  contemplated  by 
this  act,   or  whenever  he  has  reason  to  believe  that  the 
public  convenience  and  advantage  will  not  be  promoted 
by  the  opening  of  such  bank,  or  whenever  he  has  reason 
to  believe  that  the  corporate  name  assumed  by  such  bank 
resembles,  so  closely  as  to  be  likely  to  cause  confusion, 
the  name  of  any  other  bank  previously  formed  under  the  fs'suod'bcforeU"  ^^ 
laws    of   this   state.       Before    issuing    such    certificate    the  pUance'with°requ^©- 

•     ,  1        t        f    1  1  L     11  •  ments  as  to  capital 

supermtendent  or  banks  shall  examme,  or  cause  an  ex-  and  surplus. 
amination  to  be  made,  in  order  to  ascertain  whether  the 
requisite  capital  of  such  bank  has  been  paid  up  in  cash 
or  the  requisite  reserve  or  surplus  fund  has  been  accumu- 
lated. The  superintendent  of  banks  shall  not  authorize 
such  bank  to  commence  business  until  it  appears  from  such 
examination,  or  other  evidence  satisfactory  to  him,  that 
the  requisite  capital  has  been,  in  good  faith,  subscribed 
and  paid  in,  in  cash,  or  that  the  requisite  surplus  or  re- 
serve fund  has  been  accumulated  or  paid  in,  in  cash,  and 

[1471 


§  127-130  BLYTH,  WITTER  &  CO. 

Fees  payable.  Until  Said  bank  shall  have  paid  a  fee  of  fifty  dollars  for 
each  department  to  be  operated  by  said  bank. 

[Publishers'  note,  re  Section  127:  See  Appendix,  Sec.  1278  C.  C.  P.] 
When  articles  filed 

anIaSp?rcrtio1mat  Section  128.  When  the  certified  copy  of  articles  of 
'^To  w^^lrt^in  fl^rss  incorporation  of  any  bank  shall  have  been  filed  with  the 
"^stSoiderTttc!  secretary  of  state,  and  application  made  for  the  issuance 
of  a  certificate  to  do  business  as  a  bank,  the  superintend- 
ent of  banks,  provided  he  has  not  withheld  granting  his 
certificate  for  any  of  the  reasons  set  forth  in  section  one 
hundred  tw^enty-seven  hereof,  shall  ascertain,  from  the 
best  sources  of  information  at  his  command,  whether 
the  character  and  general  fitness  of  the  persons  named  as 
stockholders  are  such  as  to  command  the  confidence  of 
the  community  in  which  such  bank  is  proposed  to  be 
located,  and,  if  so  satisfied,  he  shall  within  sixty  days 
after  such  application  has  been  made  to  him,  issue,  under 
his  hand  and  official  seal,  the  certificate  of  authoriza- 
tion required  by  this  act.  The  superintendent  of  banks 
shall  file  a  duplicate  of  such  certificate  in  his  own  office. 

Departmental  bank       Section    129.     Every  bank  doing  a  departmental  busi- 

must  make  and  pub-  .  ciir  L 

lish  separate  finan-  ness  shall  render  to  the  superintendent  of  banks  for  each 

cial  reports  of  each 

department,  department  conducted  by  it,  a  separate  report  showing 
in  detail  as  required  by  section  one  hundred  thirty  of  this 
act,  the  actual  financial  condition  of  such  department 
and  shall  at  the  time  of  furnishing  said  report  separately 
publish  the  statement  for  each  department  as  provided 
in  section  one  hundred  thirty-two  of  this  act. 

Verified  reports  to       Section    I  30.      Every  bank,   organized  under  the  laws 

whtn^ver  required  of  this  State,  shall,  whenever  required  by  the  superintend- 
by  superintendent.  rii  1  .•  •••         it--  'CJ 
ent  of  banks,  make  a  report  in  writing  to  mm,  venried 

by  the  oath  of  its  president  and  its  secretary  or  cashier. 

What  such  reports  or   two   principal    officers.      Such   report  shall   show   the 

must  show.  *^ 

actual  financial  condition  of  the  bank  making  the  report, 
at  the  close  of  any  past  day  designated  by  the  superin- 
tendent, and  shall  specify  the  following: 

[148] 


STATE  BANKING  DEPARTMENT  §  130 

1 .  The  amount  of  its  capital  stock  and  the  number  of  ^'*  ""'^ ''"''  ■■*" 

■^  ports  mult  inow — 

shares  into  which  it  is  divided.  cont'd. 

2.  The  names  of  the  directors  and  the  number  of 
shares  of  stock  held  by  each. 

3.  The  total  amount  of  capital  actually  paid  in,  in 
cash,  and  the  total  amount  of  surplus,  reserve  and  any 
other  funds. 

4.  The  total  amount  due  the  depositors. 

5.  The  total  amount  and  character  of  any  other  lia- 
bilities it  may  have. 

6.  The  amount  at  which  the  lot  and  building  occupied 
by  the  bank  for  the  transaction  of  its  regular  business 
stands  debited  on  its  books;  also  the  market  value  of 
all  other  real  estate  held,  whether  acquired  in  settlement 
of  loans  or  otherwise,  the  original  cost  to  the  bank,  the 
date  when  acquired,  the  amount  at  which  it  stands 
debited  on  the  bank  books,  in  what  counties  situated, 
and  in  what  name  the  title  is  vested,  if  not  in  the  name  of 
the  bank  itself. 

7.  The  amount  loaned  on  real  estate,  specif3dng  the 
amount  secured  on  real  estate  in  each  county  separately; 
also  specifying  the  name  of  the  person  in  whose  name  the 
property  is  held  in  trust  or  as  security,  in  case  it  is  held 
in  any  name  other  than  that  of  the  bank  and  the  instru- 
ment creating  the  security  does  not  itself  disclose  the 
name  of  the  bank. 

8.  The  amount  invested  in  bonds,  designating  the 
name  and  amount  of  each  particular  kind. 

9.  The  amount  loaned  on  stocks  and  bonds,  desig- 
nating each  particular  class  and  the  amount  thereof. 

1  0.  The  amount  of  money  loaned  on  other  securities, 
with  a  particular  designation  of  each  class  and  the 
amount  loaned  on  each. 

[149] 


§130  BLYTH,  WITTER  &  CO. 

What  such  bank        |  ]     jj^g  amount  and  kind  of  money  on  hand  or  de- 
reports  must  •' 

show  (Cont'd,  posited  in  any  other  bank  or  place,  with  the  name  of  the 
place  where  deposited  and  the  amount  in  each  place. 

1  2.  Any  other  property  held,  or  any  amount  of  money 
loaned,  deposited,  invested  or  placed,  not  otherwise 
herein  enumerated,  and  the  place  w^here  situate  and  the 
value  of  said  property,  and  the  amount  so  loaned,  de- 
posited or  placed. 

1  3.  The  date  on  which  examination  of  the  bank  was 
last  made  by  its  board  of  directors  and  the  date  on  which 
report  of  such  examination  was  filed,  as  required  by 
section  one  hundred  thirty-nine  of  this  act. 

1 4.  The  outstanding  and  unpaid  amounts  of  any  loans 
made  by  the  bank,  w^hich  under  the  provisions  of  either 
section  sixty-five  or  eighty-three  of  this  act  are  required 
to  be  reported  to  the  superintendent  of  banks. 

15.  Any  overdrafts  and  any  loans,  investments,  acts 
or  omissions  violative  of  or  not  in  conformity  with  any 
provision  of  this  act  which  may  be  specifically  called  for. 

California  branch  of  Every  foreign  Corporation  transacting  the  business  of 
de°/vM^fied"reportTo  banking  in  this  state  shall  make  the  report  herein  re- 
"^  '  quired  as  far  as  such  report  may  relate  to  the  affairs  of 
such  corporation  in  this  state,  and  every  foreign  corpora- 
tion must  particularly  render  the  report  required  by  sub- 
divisions three,  four,  five,  six,  seven,  eight,  nine,  ten, 
eleven,  twelve,  thirteen,  fourteen,  and  fifteen  of  this  sec- 
tion. Such  report  shall  be  made  in  writing  and  verified 
by  the  oath  of  one  of  its  duly  authorized  officers  or 
managers  residing  in  this  state.  The  oaths  of  the  officers 
and  the  statements  above  required  shall  state  that  they 
and  each  of  them  have  a  personal  knowledge  of  the  mat- 
ters therein  contained,  and  that  they  believe  every  alle- 
gation, statement,  matter,  and  thing  therein  contained  is 
true.  Any  wilful  false  statement  in  the  premises  shall  be 
perjury  and  shall  be  punished  as  such. 

[150] 


STATE  BANKING  DEPARTMENT  §  I  30a- 132 

Section  1  30a.     In  addition  to  the  information  obtained  ^""*\'"r  ""!!*" 

Dank  to  furnish 

from  the  report  required  by  the  provisions  of  section  one  *<i<i>tionai  report. 

hundred   thirty  of   this  act,    the  superintendent   of  banks 

shall  also  have  the  power  to  require  any  bank  to  furnish 

a  special  report  in  writing,  verified  as  required  by  section 

one  hundred  thirty  of  this  act,  whenever  in  his  judgment 

such  special  report  is  necessary  to  inform  him  fully  of  the 

actual  financial  condition  and  affairs  of  such  bank.     Any  mjliu/rcport'**' 

wilful  false  statement  in  the  premises  shall  be  perjury  and  <ieemed  perjury. 

shall  be  punished  as  such. 

Section    131.      The  superintendent  of  banks  shall  call  Supt.  to  caii  for 

*  reports  at  least 

for  the  reports  specified  by  section  one  hundred  thirty  of  ^^'^^^  t''"^* »  year. 
this  act  at  least  three  times  each  year.  The  "past  day 
designated  by  the  superintendent"  of  banks  under  the 
provisions  of  section  one  hundred  thirty  of  this  act  shall 
for  at  least  three  times  be  the  day  designated  by  the 
comptroller  of  currency  of  the  United  States  for  reports 
of  national  banking  associations. 

Section    132.      At  the  time  of  furnishing  such  report  Bank  shall  publish 

.         ,      .,        I  condensed  statement 

to   the   superintendent   of   banks,    every   bank   shall   also  of  financial  condi- 

r    •         r  •    1  !•    •  tion  at  time  of  f urn- 

publish  a  condensed  statement  of  its  financial  condition,   ishing  above  report. 

at  least  once,  in  some  newspaper  of  general  circulation, 
published  in  the  city  or  town  where  its  principal  place 
of  business  is  located,  and,  if  no  paper  is  published  in 
such  town,  then  in  some  newspaper  of  general  circulation 
in  the  county  where  its  principal  place  of  business  is 
located.  Such  published  statement  shall  show  the  total 
amount  of  loans,  the  total  amount  of  overdrafts,  the 
total  amount  invested  in  bonds  and  other  securities,  the 
total  amount  due  from  banks,  the  total  amount  of  checks 
and  other  cash  items,  the  total  amount  of  cash  on  hand, 
capital  paid  in,  surplus  funds;  undivided  profits,  less  ex- 
penses and  taxes  paid;  due  to  other  banks  and  bankers, 
due  to  trust  companies  and  savings  banks;  individual  de- 
posits subject  to  checks;  demand  certificates  of  deposit; 
time  deposits;  certified  checks;  cashier's  checks  outstand- 

[1511 


what  published 
statement  shall  show. 


§  132-133  BLYTH,  WITTER  &  CO. 

ing;  and  such  other  items  as  will  show  the  actual  financial 
condition  of  the  bank  making  the  report. 

Supt.  finding  capital       Section  I  33.     Whenever  it  shall  appear  from  the  report 

impaired  shall  "^ 

require  bank  to  of  anv  bank,   or  the  superintendent  of  banks  shall  have 

make  good  the 

deficiency  within  reason  to  believe  that  the  capital  of  any  bank  is  impaired 
or  reduced  below  the  amount  required  by  law,  it  shall 
be  the  duty  of  the  superintendent  of  banks  and  he  shall 
have  the  power  to  examine  said  bank  and  ascertain  the 
facts,  and  in  case  he  finds  such  impairment  or  reduction 
of  capital,  he  shall  require  such  bank  to  make  good  the 
deficiency  so  appearing  within  sixty  days  after  the  date  of 
Directors  of  bank  to  such  requisition.     The  directors  of  every  such  bank,  upon 

levy  assessment  to 

repair  deficiency,  which  such  requisition  shall  have  been  made,  shall  levy  an 
assessment  upon  the  stock   thereof  to  repair  such  defi- 
ciency, and  shall  cause  notice  of  such  requisition  to  be 
^mTke*goorirap''afred  g^ven  to  each  Stockholder  of  the  bank  and  of  the  amount 
capital.  qJ  ^YiQ  assessment  which  he  must  pay  for  the  purpose  of 
making  good   such   deficiency,   by  a  written   or  printed 
notice  mailed  to  such  stockholder  at  his  last  known  ad- 
dress or  served  personally  upon  him.     If  any  stockholder 
Procedure  for  levy-  shall  refusc  or  neglect  to  pay  the  assessment  specified  in 

ing  and  collecting  .  .  ,  .         ,  .  ,  ,  ,  ,  r  .,. 

assessment  on  bank  such  notice  Within  thirty  days  from  the  date  or  mailing  or 
serving  such  notice  as  aforesaid,    the  directors   of  such 

Directors  may  sell  bank  shall  have  the  right  to  sell  to  the  highest  bidder  at 
private  sale,  public  auction  the  stock  of  such  stockholder,  after  giving 
a  previous  notice  of  such  sale  for  ten  days  in  a  newspaper 
of  general  circulation  published  in  the  county  where  the 
principal  place  of  business  of  such  bank  is  located,  and 
a  copy  of  such  notice  of  sale  shall  also  be  served  on  the 
owner  of  such  stock  by  being  served  personally  on  him  or 
by  mailing  to  his  last  known  address  ten  days  before  the 
day  fixed  for  such  sale;  or  such  stock  may  be  sold  at 
private  sale  and  without  such  public  notice;  provided, 
however,  that  before  making  such  private  sale  thereof 
an  offer  in  writing  shall  first  be  obtained  and  a  copy 
thereof  served  upon  the  owner  of  record  of  the  stock 

[152] 


STATE  BANKING  DEPARTMENT  §  133-134 

sought  to  be  sold,  either  personally  or  by  mailing  a  copy 

of   such   offer   to   his   last   known   address,    and    if,    after  Method  of  making 

such  private  sale. 

service  of  such  offer,  such  owner  shall  still  refuse  or 
neglect  to  pay  such  assessment  within  two  weeks  from 
the  time  of  the  service  of  such  offer,  the  said  directors 
may  accept  such  offer  and  sell  such  stock  to  the  person 
making  such  offer,  or  to  any  other  person  or  persons  mak- 
ing a  larger  offer  than  the  amount  named  in  the  offer 
submitted  to  the  stockholder;  but  such  stock  shall  in  no 
event  be  sold  for  a  smaller  sum  than  the  valuation  put 
on  it  by  the  superintendent  of  banks  in  his  determination 
and  requisition  as  to  said  assessment,  nor  for  less  than 
the  amount  of  said  assessment  so  called  for  and  the  ex- 
pense of  sale.     Out  of  the  avails  of  the  stock  so  sold,  the  Application  of  pro- 

di      II  I  f  1.1    ceeds  of  sale. 

irectors    sriall    pay    trie    amount    of    assessment    levied 

thereon,  and  the  necessary  costs  of  sale,  and  the  balance, 
if  any,  shall  be  paid  to  the  person  or  persons  whose  stock 
has  thus  been  sold.  A  sale  of  stock  as  herein  provided  Effect  of  sale,  upon 
shall  effect  an  absolute  cancellation  of  the  outstanding 
certificate  or  certificates  evidencing  the  stock  so  sold, 
and  shall  make  the  same  null  and  void,  and  a  new  certi- 
ficate shall  be  issued  by  the  bank  to  the  purchaser  thereof. 

Section  1  34.     If  it  shall  appear  to  the  superintendent  of  ^"p*  ™*/  °'^''" 

bank  to  discontinue 

banks  that  any  bank  has  violated  or  failed  to  comply  with  violations  of  its 

^  •'  articles  or  State 

the  provisions  of  its  articles  of  incorporation,  or  any  law  i*^-  «*<=. 
of  this  state,  he  may,  by  an  order  under  his  hand  and 
official  seal,  which  seal  must  be  adopted  by  him,  addressed 
to  such  bank,  direct  such  bank  to  discontinue  such  viola- 
tion and  to  comply  with  the  law;  or,  if  it  shall  appear 
to  the  superintendent  of  banks  that  such  bank  is  conduct- 
ing business  in  an  unsafe  or  injurious  manner,  he  may, 
in  like  manner  direct  the  discontinuance  of  any  such  un- 
safe or  injurious  practices.     Such  order  shall  require  such  qui^Vb^nk  to*how 

bl.i  If  .1  -iJifLI  cause  why  order  shall 

ank  to  show  cause,  before  trie  superintendent  ot  banks,  not  be  made  final. 

at  a  time  and  place  to  be  fixed  by  him,  why  said  order 

should  not  be  observed.     If  upon  such  hearing  it  shall  ap- 

[1531 


§  134- 135a  BLYTH,  WITTER  &  CO. 

pear  to  the  superintendent  of  banks  that  such  bank  is 
conducting  business  in  an  unsafe  or  injurious  manner,  or 
is  violating  or  failing  to  comply  with  the  provisions  of  its 
articles  of  incorporation,  or  any  law  of  this  state,  then 
the  superintendent  of  banks  shall  make  such  order  final, 
and  such  bank  shall  immediately  comply  with  such 
order  made  by  the  superintendent  of  banks.  Such  bank 
If  such  order  is  made  shall   have  ten   days  after  any  such   order  is  made   final 

final,  bank  has  10  j  j 

days  to  secure  in-  jn  which  suit  may  be  commenced  to  restrain  enforcement 

junction. 

of  such  order,  and  unless  such  action  be  so  commenced 
and  enforcement  of  said  order  be  enjoined  within  ten 
days,  by  the  court  in  which  such  suit  is  brought,  then  such 
bank  shall  comply  with  such  order. 

Supt.  may  call  meet-       Section   135.     Whenever  the  superintendent  of  banks 

ing  of  stockholders 

of  bank,  shall  deem  it  expedient  he  may  call  a  meeting  of  the 
stockholders  of  any  bank  organized  under  the  laws  of 
this  state,  by  a  personal  notice  of  such  meeting  for  fifteen 
days  previous  thereto.  All  necessary  expense  incurred  in 
the  serving  of  such  notice  shall  be  borne  by  the  bank 
whose  stockholders  are  required  to  convene. 

Involuntary  disso-       Section   1  35a.     If  the  capital  of  any  bank  shall  be  im- 

lution. 

paired,   or  if  any  bank  shall  refuse  to  submit  its  books, 

papers  and  concerns  to  the  inspection  of  any  examiner, 

or  if  any  officer  thereof  shall  refuse  to  be  examined  upon 

Action  by  Supt.  to  oath  touching  the  concerns  of  such  bank,  or  if  such  bank 

dissolve  bank  having     iii-i  i  ••  c  •  •    ^  c  • 

impaired  capital,  or  shall  Violate  the  provisions  or  its  articles  of  incorporation, 

refusing  to  submit  ,  ri-  t  iiiiii  i 

to  examination,  or  or  any  law  ot  this  State,  or  ir  such  bank  shall  suspend  pay- 
violating:  law  of  .  .        11..  -f        1    1       1      1    11  1 

state,  etc.  ment  or  its  obhgations,  or  ir  such  bank  shall  conduct  its 

business  in  an  unsafe  or  unauthorized  manner,  or  if  from 
any  examination  or  report  provided  for  by  this  act  the 
superintendent  of  banks  shall  conclude  that  such  bank  is 
in  an  unsound  or  unsafe  condition  to  transact  the  business 
for  which  it  is  organized,  or  that  it  is  unsafe  and  inex- 
pedient for  it  to  continue  business,  an  action  to  procure  a 
judgment  dissolving  such  corporation  may  be  maintained 
by  the  superintendent  of  banks. 

11541 


STATE  BANKING  DEPARTMENT  §  136 


Section  1  36.     Whenever  it  shall  appear  to  the  superin-  Supt.  may  uke  poi- 

,  111  •!  11  ••  Bfssion  of  business 

tendent  of  banks  that  any  bank  has  violated  the  provisions  and  property  of  such 

.   .  .  ,  f     1   •  bank  until  it  resumes 

of  its  articles  of  incorporation  or  any  law  of  this  state,  or  business  or  its  affairs 

...  -  .  .        J    be  finally  liquidated. 

is  conducting  its  business  in  an  unsafe  or  unauthorized 
manner,  or  if  the  capital  of  any  bank  is  impaired,  or  if 
any  bank  shall  refuse  to  submit  its  books,  papers  and  con- 
cerns to  the  inspection  of  any  examiner,  or  if  any  officer 
thereof  shall  refuse  to  be  examined  upon  oath  touching 
the  concerns  of  any  such  bank  or  if  any  bank  shall  sus- 
pend payment  of  its  obligations,  or  if  from  any  examina- 
tion or  report  provided  for  by  this  act  the  superintendent 
of  banks  shall  have  reason  to  conclude  that  such  bank 
is  in  an  unsound  or  unsafe  condition  to  transact  the  busi- 
ness for  which  it  is  organized,  or  that  it  is  unsafe  and  in- 
expedient for  it  to  continue  business,  or  if  any  bank  shall 
neglect  or  refuse  to  observe  any  order  of  the  superintend- 
ent of  banks  specified  in  sections  one  hundrd  thirty-three 
or  one  hundred  thirty-four  of  this  act,  the  superintendent 
of  banks  may  forthwith  take  possession  of  the  property 
and  business  of  such  bank  and  retain  such  possession  until 
such  bank  shall  resume  business,  or  its  affairs  be  finally 
liquidated  as  herein  provided.      On  taking  possession  of  f"^f  "^V°  ^'  ^''^' 


the  property  and  business  of  any  such  bank  the  superin-  conserving  assets 


lowed  by  Supt.  in 
conserving  assets 
and  liquidating  af- 

tendent  of  banks  shall  forthwith  give  notice  of  such  fact  f^^"  °f  «">«•»  ^"i'- 
to  any  and  all  banks,  trust  companies,  associations  and 
individuals,  holding  or  in  possession  of  any  assets  of 
such  bank.  No  bank,  trust  company,  association  or  indi- 
vidual knowing  of  such  taking  possession  by  the  superin- 
tendent of  banks,  or  notified  as  aforesaid,  shall  have  a 
lien  or  charge  for  any  payment,  advance  or  clearance 
thereafter  made,  or  liability  thereafter  incurred  against 
any  of  the  assets  of  the  bank  of  whose  property  and  busi- 
ness the  superintendent  of  banks  shall  have  taken  posses- 
sion as  aforesaid.      Such  bank  may,  w^ith  the  consent  of  Bank  may  resume 

,  .  ,      business  with  consent 

the  superintendent  of  banks,  resume  business  upon  such  of  Supt. 
conditions  as  may  be  approved  by  him.      Upon   taking 
possession  of  the  property  and  business  of  any  such  bank 

[155] 


§136  BLYTH,  WITTER  &  CO. 


the  superintendent  of  banks  shall  have  authority  to  collect 
moneys  due  to  such  bank  and  do  such  other  acts  as  are 
necessary  to  conserve  its  assets  and  business,  and  shall 
proceed  to  liquidate  the  affairs  thereof  as  hereinafter 
provided.  The  superintendent  of  banks  shall  collect  all 
debts  due  and  claims  belonging  to  it,  and  upon  the  order 
of  the  superior  court  may  sell  or  compound  any  bad  or 
By  order  of  court,  doubtful  debts.      If  a  purchaser  for  any  bad  or  doubtful 

Supt.  may  sell  bad  or  i  i        .         i  i   •  •  i      i  i        i 

doubtful  debts,  or  debts  Can  not  be  obtained  and  it  appears  improbable  that 

sue  thereon;  may  i        i        i  i     i  i  r  • 

sell  bank's  real  recovery  thcreon  can  be  aad  and  that  the  costs  or  actions 
erty  and  enforce  to  cnforce  Collection  of  the  same  would  probably  be  lost, 

stockholders'  lia-  i-  i  •  i  i  i 

biiity.  the  court  may  direct  that  suits  thereon  need  not  be 
brought.  On  like  order  he  may  sell  any  real  or  personal 
property  of  such  bank  on  such  terms  as  the  court  shall 
direct:  and  may,  if  necessary  to  pay  the  debts  of  such 
bank,  enforce  the  constitutional  individual  liability  of 
stockholders  by  action  to  be  brought  within  three  years 
after  the  date  of  his  taking  possession  of  the  afiFairs  of 
such  bank.  The  superintendent  of  banks  shall  determine 
the  necessity  of  such  action  and  the  amount  necessary  to 
recover  from  the  stockholders  to  fully  pay  all  liabilities  of 
such  bank.  Such  action  may  be  in  equity  and  against  all 
stockholders  upon  whom  service  of  process  in  the  State 
of  California  can  be  had,  and  the  court  may  therein  deter- 
mine and  provide  for  any  equities  as  between  the  stock- 
holders including  the  proportions  of  each  stockholder  to 
any  surplus  of  money  or  assets  that  may  remain  after  the 
payment  of  all  liabilities  and  the  expenses  of  liquidation. 
The  superintendent  of  banks  may  also  maintain  an  action 
against  any  stockholder  residing  out  of  the  state  or  upon 
whom  service  of  process  can  not  be  had  within  the  state, 
in  any  court  of  the  United  States  or  of  any  state  or  coun- 
try. Any  judgment  so  obtained  by  the  superintendent  of 
banks  against  such  or  any  of  such  stockholders  which  is 
of  doubtful  value  may  be  compromised  and  compounded 
by  the  superintendent  of  banks  on  such  terms  and  condi- 
tions as  the  superior  court  may  direct  or  authorize.     The 

[1561 


STATE  BANKING  DEPARTMENT  §  136 

superintendent  of  banks  shall  file  a  notice  of  pendency  supt.  shall  flie  with 

f.  •  •        .1  .  1       •  cr  f    iL  1        county  recorder  notice 

action   in   the   county  recorder  s   omce   or  the  county  of  pendency  of  such 

where  such  action  is  brought.      At  any  time  prior  to  the  *'^*'°°' 

trial  of  any  such  action,  any  creditor  may  serve  upon  the  _    , .. 

•'  ■'  J  f  Creditor  may  in  in- 

superintendent  of  banks  and  file  with  the  court  wherein  dividual  capacity 

*^  maintain  artion 

such  action  is  pending,  notice  that  he  elects  to  maintain  against  stockholders. 
an  action  against  the  stockholders  or  any  of  them,  in  his 
individual   capacity  and  thereupon  the  amount  sued   for 
in   such   action   shall   be   reduced    accordingly   and    such 
creditor  shall  not  be  entitled  to  share  in  the  proceeds  re- 
sulting from  such  action  brought  by  the  superintendent 
of  banks.     For  the  purpose  of  executing  and  performing 
any  of  the  powers  and  duties  hereby  conferred  upon  him,  supt.  may  in  name 
the  superintendent  of  banks  may,  in  the  name  of  the  de-  or  in  hi's'own  name 
linquent  bank  or  in  his  own  name,  prosecute  and  defend  suUs^,  etc. .^execute" 
any  and  all  suits  and  other  legal  proceedings  and  may,  in  neces3lry'to"effectu- 
the  name  of  the  delinquent  bank  or  in  his  own  name  as  or^comprom^ise^by 

..  .  1  ij  JJI-  Jll    order  of  court,  etc. 

trustee  execute,  acknowledge  and  dehver  any  and  all 
deeds,  assignments,  releases  and  other  instruments  neces- 
sary and  proper  to  effectuate  any  sale  of  real  or  personal 
property  or  sale  or  compromise  or  compound  authorized 
by  order  of  the  court  as  herein  provided;  and  any  deed 
or  other  instrument,  executed  pursuant  to  the  authority 
hereby  given,  shall  be  valid  and  effectual  for  all  pur- 
poses, as  though  the  same  had  been  executed  by  the 
officers  of  the  delinquent  bank  by  authority  of  its  board 
of  directors.  In  case  any  of  the  real  property  so  sold  is 
located  in  a  county  other  than  the  county  in  which  the 
application  to  the  court  for  leave  to  sell  the  same  is 
made,  the  superintendent  of  banks  shall  cause  a  certified 
copy  of  the  order  authorizing  or  ratifying  such  sale  to 
be  filed  in  the  office  of  the  recorder  of  the  county  in 
which  the  said  real  property  is  located.  The  superintendent 
of  banks  may,  under  his  hand  and  official  seal,  appoint 
one  or  more  special  deputy  superintendents  of  banks, 
as  agent  or  agents,  with  the  powers  specified  in  the  certi- 
ficate   of   appointment   hereinafter   mentioned,    to    assist 

[1571 


§136  BLYTH,  WITTER  &  CO. 

him  in  the  duty  of  liquidation  and  distribution,  the  certi- 
ficate of  appointment  to  be  filed  in  the  office  of  the  super- 
intendent of  banks,  and  a  certified  copy  in  the  office  of 
the  clerk  of  the  county  in  which  the  principal  office  of 
such  bank  is  located. 

Supt.  may  delegate       The  Superintendent  of  banks  may  from  time  to  time, 

duties  to  deputy. 

by  a  certificate  of  appointment  under  his  hand  and  offi- 
cial seal,  specifying  the  powers  conferred,  authorize  a 
special  deputy  superintendent  to  perform  such  duties 
connected  with  such  liquidation  and  distribution  as  the 
superintendent  of  banks  may  deem  proper.  Such  certi- 
ficate of  appointment  shall  be  filed  in  the  office  of  the 
superintendent  of  banks  and  a  certified  copy  in  the  office 
of  the  clerk  of  the  county  in  which  the  principal  office 
Supt.  may  employ  of  such  bank  is  located.      The  superintendent  of  banks 

counsel  and  expert  ,  ,  i  i  i  . 

assistance  necessary  may  employ  such  counsel  and   procure  sucri  expert  as- 

in  liquidation.  •        i        t        •  j       • 

sistance  and  advice  as  may  be  necessary  m  the  liquidation 
and  distribution  of  the  assets  of  such  bank,  and  for  that 
purpose  may  retain  such  of  the  officers  or  employees  of 
such  bank  as  he  may  deem  necessary.  The  superintend- 
ent of  banks  shall  require  from  a  special  deputy  super- 
intendent and  from  such  assistants  such  security  for  the 
faithful  discharge  of  their  duties  as  he  may  deem  proper. 
^°o"c?edfto^r?to  The  Superintendent  of  banks  shall  cause  notice  to  be 
^aTalnst'btn'k'  g^vcn  by  advertisement,  in  such  newspapers  as  he  may 
direct,  weekly  for  three  consecutive  months,  calling  on 
all  persons  who  may  have  claims  against  such  bank  to 
present  the  same  to  the  superintendent  of  banks,  and 
make  legal  proof  thereof  at  a  place  and  within  a  time, 
not  earlier  than  the  last  day  of  publication,  to  be  therein 
specified.  The  superintendent  of  banks  shall  mail  a 
similar  notice  to  all  persons  whose  names  appear  as 
creditors  upon  the  books  of  the  bank.  If  the  superin- 
tendent of  banks  doubts  the  justice  and  validity  of  any 
claim,  he  may  reject  the  same,  and  serve  notice  of  such 
rejection  upon  the  claimant,  either  by  mail  or  personally. 

[158] 


STATE  BANKING  DEPARTMENT  §  136 

An  affidavit  of  the  service  of  such  notice,  which  shall  be 
prima  facie  evidence  thereof  shall  be  filed  with  the  super- 
intendent of  banks.     Any  action  upon  a  claim  so  rejected  Action  upon  rejected 

claim — when  must 

must   be   brought   within   six   months   after   such   service,  be  brought. 

Claims  presented  after  the  expiration   of  the  time  fixed 

in  the  notice  to  creditors  shall  be  entitled  to  share  in  the 

distribution  only  to  the  extent  of  the  assets  in  the  hands 

of    the    superintendent    of    banks    equitably    applicable 

thereto.      Upon   taking   possession   of  the   property  and  Supt.  to  make  and 

f  111  •  1  f    1  1  1      11    *'^  inventory  of 

assets  or  any  bank,  the  superintendent  or  banks  shall  assets. 
make  an  inventory  of  the  assets  of  such  bank  in  dupli- 
cate, one  to  be  filed  in  the  office  of  the  superintendent  of 
banks,  and  one  with  the  papers  in  said  proceeding  in  the 
office  of  the  clerk  of  the  county  in  which  the  principal 
office  of  such  bank  is  located;  upon  the  expiration  of  the  Supt.  to  file  with 

^  '^  county  clerk  list  of 

time   fixed    for   the   presentation   of   claims   the   superin-  claims  presented, 

"^  specifying  claims 

tendent  of  banks  shall  make  in  duplicate  a  full  and  com-  rejected, 
plete  list  of  the  claims  presented,  including  and  specify- 
ing such  claims  as  have  been  rejected  by  him,  one  to  be 
filed  in  the  office  of  the  superintendent  of  banks,  and  one 
with  the  papers  in  said  proceeding  in  the  office  of  the 
clerk  of  the  county  in  which  the  principal  office  of  such 
bank  is  located.      Thereafter  he  shall  make  and   file  in  Supplemental  lists 

of  claims. 

said  offices  as  above  provided  at  least  fifteen  days  be- 
fore each  application  to  the  court  for  leave  to  declare  a 
dividend  a  supplemental  list  of  the  claims  presented  since 
the  last  preceding  list  was  filed,  including  and  specifying 
such  claims  as  have  been  rejected  by  him,  and  in  any 
event  he  shall  make  and  file  as  above  provided  such  a 
list  at  least  once  every  six  months  after  the  filing  of  the 
original  list,  as  long  as  he  shall  remain  in  possession  of 
the  property  and  business  of  any  such  bank.  Such  in- 
ventory and  list  of  claims  shall  be  open  at  all  reason- 
able times  to  inspection.    The  compensation  of  the  special  Compensation  of 

special  deputies  and 

deputy    superintendents,    counsel    and    other    employees  other  employees  and 

_    _  1    !•        •      all  expenses  of  sup- 

and  assistants,  and  all  expenses  of  supervision  and  liqui-  ervision— how  to  bo 

fixed,  paid  and  re- 

dation,  shall  be  fixed  by  the  superintendent  of  banks  and  ported. 

[159] 


§136  BLYTH,  WITTER  &  CO. 


shall  upon  the  certificate  of  the  superintendent  of  banks  be 
paid  out  of  the  funds  of  such  bank  in  the  hands  of  the  su- 
perintendent of  banks.  All  such  expenses  must  be  reported 
by  the  superintendent  of  banks  to  the  superior  court  of  the 
county  where  the  principal  place  of  business  of  such  bank 
is  located  and  settled  by  such  court  upon  notice  to  such 
Moneys  collected—  bank.      The  moneys  collected  by  the  superintendent  of 

how  deposited, 

banks  shall  be  from  time  to  time  deposited  in  one  or 
more  state  banks  of  deposit,  savings  banks  or  trust  com- 
panies, and,   in  case  of  the  suspension  or  insolvency  of 
Such  deposits  jihe  depositary,  such  deposit  shall  be  preferred  before  all 

preferred.  r  ^ 

other  deposits.     At  any  time  after  the  expiration  of  the 
date   fixed    for   the   presentation   of   claims   the   superior 
court    may    by    order    authorize    the    superintendent    of 
banks  to  declare  out  of  the  funds  remaining  in  his  hands 
after  the  payment  of  expenses  one  or  more  dividends, 
Declaration  of  ^^^  after  the  expiration  of  one  year  from  the  first  pub- 
dividends— how  |jj,gtjQj^  qJ  notice  to  creditors  he  may  declare  a  final  divi- 
dend, such  dividends  to  be  paid  to  such  persons,  and  in 
such  amounts,  and  upon  such  notice,  as  may  be  directed 
by  the  superior  court  of  the  county  in  which  the  princi- 
es°teKrty  t^o^cialms"  pal   office  of  such  bank  is  located.      Objections   to  any 
supt.  to^be  heard  claim  not  rejected  by  the  superintendent  of  banks  may 

and  disposed  of  by  ,,  .  llf!T  £U 

court  or  referee,  be  made  by  any  party  interested  by  tiling  a  copy  or  such 
objections  with  the  superintendent  of  banks,  who  shall 
present  the  same  to  the  superior  court  at  the  time  of  the 
next  application  to  declare  a  dividend.  The  court  to 
which  such  application  is  made  shall  thereupon  dispose 
of  said  objections  or  may  order  a  reference  for  that  pur- 
pose, and  should  the  objections  to  any  claim  be  sustained 
by  the  court  or  by  the  referee,  such  claim  shall  not  be 

Court  to  make  pro-  allowed  by  the  superintendent  of  banks  until  the  claim- 
vision  for  unproved 

or  unclaimed  ^^^  shall  have  established  his  claim  by  the  judgment  of 

deposits.  "^  .^        ^ 

a  court  of  competent  jurisdiction.     The  court  must  make 
proper  provision  for  unproved  or  unclaimed  deposits. 

[160] 


STATE  BANKING  DEPARTMENT  §  136 

Should   any   bank   at    the   time   the   superintendent   of  bailors  of  property 

^  in  delinquent  bank 

banks  takes  possession  of  its  property  and  business,  have  1°  ^®  notified  by 

Supt.  to  remove 

in  its  possession,  as  bailee  for  safekeeping  and  storage,  P''°perty- 
any  jewelry,  plate,  money,  specie,  bullion,  stocks,  bonds, 
securities,  valuable  papers  or  other  valuable  personal 
property  or  should  it  have  rented  any  vaults,  safes  or  safe 
deposit  boxes  or  any  portion  thereof  for  the  storage 
of  property  of  any  kind,  the  superintendent  of  banks 
may  at  any  time  thereafter  cause  to  be  mailed  to  the  per- 
son claiming  to  be  or  appearing  upon  its  books  to  be  the 
owner  of  such  property,  or  the  person  in  whose  name  the 
safe,  vault  or  box  stands,  a  notice  in  writing  in  a  securely 
closed,  postpaid  registered,  letter  directed  to  such  person 
at  his  post-office  address  as  recorded  upon  its  books, 
notifying  such  person  to  remove,  within  a  period  fixed 
by  said  notice  and  not  less  than  sixty  days  from  the  date 
thereof,  all  such  personal  property  and  upon  the  date 
fixed  by  said  notice,  the  contract,  if  any,  between  such 
person  and  bank  for  the  storage  of  said  property  or  for 
the  use  of  the  said  safe,  vault  or  box  shall  cease  and  de- 
termine, and  the  amount  of  the  unearned  rent  or  charges, 
if  any,  paid  by  such  person  shall  become  a  debt  of  the 
bank  to  said  person.  If  the  property  be  not  removed  k  such  property  not 
within  the  time  fixed  by  the  notice,  the  superintendent  of  fi^^bj  notke"  s^t. 
banks  may  make  such  disposition  of  said  property  as  the  to  dispose  of  same 

•'  ^  *^        *^         •'  as  court  may  direct. 

superior    court,    upon    application    thereto,    shall    direct. 

And   the  superintendent  of  banks  may  cause  any  safe,  sunt,  may  cause  any 

1.  1  .       1  1    •       1   •  •       .1  safe,  vault  or  box  to 

vault  or  box  to  be  opened  in  his  presence  or  in  the  pres-  be  opened  and  its 

ence    of    one    of    the   special    deputy    superintendents    of 

banks,   and  of  a  notary  public  not  an  officer  or  in  the 

employ  of  the  bank  or  of  the  superintendent  of  banks, 

and  the  contents  thereof,  if  any,  to  be  sealed  up  by  such 

notary  public  in  a  package  upon  which  such  notary  public 

shall  distinctly  mark  the  name  and  address  of  the  person 

in  whose  name  such  safe,  vault  or  box  stands  upon  the 

books  of  the  bank  and   shall  attach   thereto  a  list  and 

II6I1 


contents  disposed  of. 


§136  BLYTH.  WITTER  &  CO. 


description  of  the  property  therein;  and  the  package  so 
sealed  and  addressed,  together  with  the  list  and  descrip- 
tion, may  be  kept  by  the  superintendent  of  banks  in  one 
of  the  general  safes  or  boxes  of  the  bank  until  delivered 
to  the  person  whose  name  it  bears,  or  until  otherwise  dis- 
Bank  deeming  itself  posed  of  as  directed  by  the  court.     Whenever  any  such 

ag^ieved  may  en-   ^ 

join  proceedings  bank  of  whose  property  and  business  the  superintendent 

within  ten  days  r        «-  ^  .  i        i  •         l  £ 

after  Supt.  takes  of  banks  has  taken  possession  as  aforesaid,  deems  itseir 

possession.  ,  •   i   .  i 

aggrieved  thereby,  it  may,  at  any  time  within  ten  days 

after  such  taking  possession,  apply  to  the  superior  court 

in  the  county  in  which  the  principal  office  of  such  bank  is 

located   to   enjoin   further  proceedings;   and    ?aid   court, 

after  citing  the  superintendent  of  banks  to  show  cause 

why   further   proceedings   should   not  be   enjoined,    and 

^^"nd^ judgment  bearing  the  allegations  and  proofs  of  the  parties  and  de- 

entered  therein,  termiuing  the  facts  may,   upon  the  merits,   dismiss  such 

application  or  enjoin  the  superintendent  of  banks  from 

further  proceedings,    and   direct   him   to   surrender  such 

Provisions  concern-  business  and  property  to  such  bank.    An  appeal  as  above 

ing  appeal  from  r       ir         ^  ri-j  £i 

judgment,  provided  shall  operate  as  a  stay  or  the  judgment  or  the 
superior  court,  and  no  bond  need  be  given  if  the  appeal 
be  taken  by  the  superintendent  of  banks;  but  if  the 
appeal  be  taken  by  such  bank,  a  bond  shall  be  given,  as 
required  by  section  nine  hundred  forty-three  of  the  Code 
After  payment  of  of   Civil    Procedure.      Whenever    the   superintendent    of 

allowed  claims,  etc.,   ,,,,,    ,  .1  11  i-.  j 

Supt.  to  call  meet-  banks  shall  have  paid  to  each  and  every  depositor  and 

ing  of  stockholders  riiii  i-  !•  U 

to  determine  whether  creditor   of   such   bank   whose   Claim   or   claims   as   sucn 

Supt.  shall  continue  ,  .  1111  i  Jl  JJ 

liquidation  or  agent  creditor  or  depositor  shall  have  been  duly  proved  and 
purpose,  allowed,  the  full  amount  of  such  claims,  and  shall  have 
made  proper  provision  for  unclaimed  and  unpaid  de- 
posits or  dividends,  and  shall  have  paid  all  the  expenses 
of  the  liquidation,  the  superintendent  of  banks  shall  call 
a  meeting  of  the  stockholders  of  such  bank  giving  notice 
thereof  for  thirty  days  in  one  or  more  newspapers  pub- 
lished in  the  county  where  the  principal  office  of  such 
Manner  of  voting  bank  is  locatcd.     At  such  meeting  the  stockholders  shall 

at  such  meeting.  _  r   1  1  1      11    i 

determine  whether  the  superintendent  of  banks  shall  be 

[162] 


STATE  BANKING  DEPARTMENT §  136 

continued  as  liquidator  and  shall  wind  up  the  affairs  of 
such  bank,  or  whether  an  agent  or  agents  shall  be  elected 
for  that  purpose,  and  in  so  determining  the  said  stock- 
holders shall  vote  by  ballot,  in  person  or  by  proxy,  each 
share  of  stock  entitling  the  holder  to  one  vote,  and  the 
majority  of  the  stock  shall  be  necessary  to  a  determina- 
tion. 

In  case  it  is  determined  to  continue  the  liquidation  Dissolution. 
under  the  superintendent  of  banks,  he  shall  complete  the 
liquidation  of  the  affairs  of  such  bank,  and  after  paying 
the  expenses  thereof,  shall  distribute  the  proceeds  among 
the  stockholders  in  proportion  to  the  several  holdings  of 
stock  in  such  manner  and  upon  such  notice  as  may  be 
directed  by  the  superior  court.  In  case  it  is  determined 
to  appoint  an  agent  or  agents  to  liquidate,  the  stock- 
holders shall  thereupon  select  such  agent  or  agents  by 
ballot,  a  majority  of  the  stock  present  and  voting,  in 
person  or  by  proxy,  being  necessary  to  a  choice.      Such  supt.  shall  transfer 

.11  assets  to  a^ent,  who 

agent  or  agents  shall  execute  and  file  with  the  super-  s^aii  execute  bond. 
intendent  of  banks  a  bond  to  the  people  of  the  state  in 
such  amount,  with  such  sureties  and  in  such  form  as 
shall  be  approved  by  the  superintendent  of  banks,  con- 
ditioned for  the  faithful  performance  of  all  the  duties 
of  his  or  their  trust,  and  thereupon  the  superintendent 
of  banks  shall  transfer  and  deliver  to  such  agent  or 
agents  all  the  undivided  and  uncollected  or  other  assets 
of  such  bank  then  remaining  in  his  hands;  and  upon  such 
transfer  and  delivery,  the  said  superintendent  of  banks 
shall  be  discharged  from  any  and  all  further  liability  to 
such  bank  and  its  creditors.  Such  agent  or  agents  shall  tnTJLinTc^K 
convert  the  assets  coming  into  his  or  their  possession  into  du'trtbutrpropeAy^ 
cash,  and  shall  account  for  and  make  distribution  of  the 
property  of  said  bank  as  is  herein  provided  in  the  case  of 
distribution  by  the  superintendent  of  banks,  except  that 
the  expenses  thereof  shall  be  subject  to  the  direction  and 
control  of  a  court  of  record   of  competent  jurisdiction. 

[163] 


§  I36-136a     BLYTH.  WITTER  &  CO. 

In  case  of  the  death,  removal  or  refusal  to  act  of  any  such 
agent  or  agents,  the  stockholders,  on  the  same  notice,  to 
be  given  by  the  superintendent  of  banks  upon  proof  of 
such  death,  removal  or  refusal  to  act  being  filed  with 
him,  and  by  the  same  vote  hereinbefore  provided,  may 
elect  a  successor,  who  shall  have  the  same  powers  and  be 
subject  to  the  same  liabilities  and  duties  as  the  agent 
Disposition  of  diri-  originally   elected.      Dividends   and   unclaimed    deposits 

dends  and  nnclaimed  ..  •I'li  l£L  •     t.        J        m.       C 

deposits  remaining  remaining  unpEud  m  the  hands  or  the  superintenaent  or 
after  order  of  final  banks  for  six  months  after  the  order  for  final  distribution 
shall  be  by  him  deposited  with  the  state  treasurer  in  the 
same  manner  and  subject  to  the  same  disposition  as  pro- 
vided for  in  section  one  thousand  two  hundred  thirty- 
four  of  the  Code  of  Civil  Procedure.  The  superintend- 
ent of  banks  may  pay  over  the  moneys  so  held  by  him 
to  the  persons  respectively  entitled  thereto  upon  being 
furnished  satisfactory  evidence  of  their  right  to  the  same. 
In  cases  of  doubt  or  conflicting  claims  he  may  require  an 
order  of  the  superior  court  authorizing  and  directing  the 
payment  thereof. 

[Publishers'   note:    See  Chapter  496,  Siatutes  of  1917,  in  Appendix.] 

Bank  ceasing  busi-       Section    136a.      Any  bank  which  has  ceased  to  do  a 

ness  shall  immedi-  i        i  i  i  i 

ateiy  liquidate,  banking  business  whether  through  voluntary  action  on  its 
part  or  through  expiration  of  its  corporate  existence,  shall 
immediately  liquidate  its  affairs  and  any  unclaimed  de- 
posits or  dividends  shall  be  paid  into  the  state  treasury 
in  the  manner  and  for  the  purposes  provided  in  section 
one  hundred  thirty-six  of  this  act  within  six  months  after 
the  date  such  bank  ceased  to  conduct  a  banking  business. 
If  liquidation  un-  ^^^  jj^  ^^gg  j}^g  Superintendent  of  banks  shall  have  rea- 

safely  conductea  * 

Supt.  may  take  pos-  g^jj  jq  conclude  that  the  liquidation  of  such  bank  is  not 

session  and  liquidate.  ^ 

being   safely  or   expeditiously  conducted,    he   may   take 

possession   of  the  property  of  such  bank  and   liquidate 

its  affairs  in  the  same  manner  as  provided  in  section  one 

^a*B^i1.v*ed  by  intfr-  hundred  thirty-six  of  this  act.      Whenever  any  bank  of 

mIy°lppiy^for"^i  whose  property  the  superintendent  of  banks  has  taken 

junction,  possession  as  aforesaid,  deems  itself  aggrieved  thereby, 

[164] 


STATE  BANKING  DEPARTMENT §  1 36a- 1  37 

it  may  within  the  time  and  in  like  manner  and  effect  as 
provided  in  section  one  hundred  thirty-six  of  this  act 
apply  to  the  superior  court  to  enjoin  further  proceedings. 

Section    136b.      In  any  action  or  proceeding  brought  Jurisdiction  vested 

1  •.  fi-  !•  ..1..'°  superior  court  of 

under  any  provision  or  this  act,  exclusive  original  juris-  county  where  prin- 

di      11   1  1    •         1  •  r     1  cipal  place  of 

iction  shall  be  vested  in  the  superior  court  of  the  county  business  of  bank  is 

in  which  is  located  the  principal  place  of  business  of  the 
bank  affected  thereby,  and  all  proceedings  relating  to  the 
same  matter,  under  any  provision  of  this  act,  including 
proceedings  for  liquidation  of  the  affairs  of  any  such 
bank,  shall  be  filed  with  and  treated  as  a  part  of  the 
record  in  such  original  proceedings,  and  all  papers  relat- 
ing to  any  such  action  or  proceeding,  including  the  copy 
of  certificate  of  appointment  of  any  special  deputy  and 
the  inventories  required  to  be  filed  in  the  matter  of  any 
such  liquidation,  shall  be  filed  with  and  made  a  part  of 
the  record  of  such  original  proceeding,  without  the  pay- 
ment of  any  additional  fees  therefor,  and  in  any  such 
action  no  damage  may  be  awarded,  but  the  action  other- 
wise shall  be  tried  and  determined  according  to  the  pro- 
visions of  the  Code  of  Civil  Procedure. 

Section    137.       1 .    Any  bank  shall  have  the  right,   on  Voluntary  dissoiu- 

...  ..  1111  1  1  ^^<"^  may  be  had 

application  or  the  stockholders  or  members  to  apply  to  under  provisions  of 

,  .  -      ,  ......    Code  of  Civil  Pro- 

the   superior   court   or   the   county  wherein   its   principal  cedure. 
place  of  business  is  situated,  to  dissolve  said  bank  in  the 
manner  provided  for  in  title  six,  part  three  of  the  Code 
of  Civil  Procedure. 

2.   At  the  expiration  of  four  months  after  the  settle-  payment  to  county 

f      J  r        1  r      1  '  t  LI      treasurer  of  specified 

ment  or  the  hnal  account  or  the  receiver  or  any  bank  funds  by  receiver 
appointed  prior  to  July  1,  1909,  any  dividends  due  de-  juiyi,  i909. 
positors,  or  other  creditors,  or  stockholders  of  such  bank 
and  remaining  unpaid  or  uncalled  for  and  in  the  hands  of 
such  receiver  may  be  paid  by  him  into  the  treasury  of  the 
county  in  which  such  bank  is  situated  which  money  shall 
be  held  in  the  treasury  of  said  county,  and  at  the  same 
time  it  shall  be  the  duty  of  such  receiver  to  furnish  to  the 

[165] 


§  137-136 BLYTH.  WITTER  &  CO. 

county  treasury  of  said  county  a  list  of  names  of  all  de- 
positors or  other  persons  to  whom  such  money  belongs 
or  who  are  entitled  thereto  and  thereupon  such  receiver 
shall  be  entitled  to  his  discharge. 

Said  funds  to  be  paid        3.    The  moneys  referred  to  in  subdivision  two  of  this 

out  on  court  order,  i      ii    i  •  i  i  i  r      i 

section  shall  be  paid  out  on  the  order  or  the  court  ap- 
pointing such  receiver. 

When  such  funds       4.   All  moneys  paid  under  subdivision  two  of  this  sec- 
escheat  to  State.     .  11      ir  -i-r  r  ^      •  •!• 

tion,  uncalled  for  withm  hve  years  arter  bemg  paid  in, 
shall  by  operation  of  law,  and  without  action  had,  escheat 
to  the  state.  All  moneys  held  by  any  county  treasurer 
under  subdivision  two  of  this  section,  when  such  moneys 
have  escheated  to  the  state  as  hereinbefore  provided, 
shall  be  paid  by  the  county  treasurer  into  the  state  treas- 
ury, and  thereafter  only  be  drawn  out  in  such  manner 
as  may  be  provided  for  by  law  for  the  estates  of  de- 
ceased persons  escheated  to  this  state. 

Investment  of  such       5.   The  state  board  of  control  must  invest  such  moneys 

funds.  iiijfj- 

in  the  same  manner  that  the  state  school  land  fund  is 
invested  as  provided  by  law.  But  any  claimant  shall  be 
entitled  to  recover  as  herein  provided  only  the  principal 
so  paid  into  the  state  treasury. 

Penalty  for  bank       Section   1  38.      If  any  bank  shall  fail  to  make  any  re- 

failing  to  make  .111  •    •  r  •  L         J       J 

report  as  required  port  required  by  the  provisions  or  section  one  hunared 

by  Sec.  130  or  Sec.      ,  ^  iiii-  r      ^  •  -L- 

130a— to  forfeit  thirty   or   one   hundred   thirty  a   or   this   act,    withm   ten 

$100  per  day,  etc.  .  iri  i-  1  r 

days  from  the  day  designated  for  the  making  thereof 
by  the  superintendent  of  banks,  or  to  include  therein 
any  matter  required  by  the  provisions  of  either  of  said 
sections,  it  shall  forfeit  to  the  people  of  the  state  the 
sum  of  one  hundred  dollars  for  each  day  that  any  such 
report  shall  be  so  delayed  or  withheld  by  the  failure  or 
neglect  of  such  bank. 

In  event  of  such        In  the  cvcnt  of  the  failure  of  any  such  bank  to  make 
make  examination  any  such  report  required  from  it,   the  superintendent  of 

at  bank's  expense,  ,,  .1.1.  .  .  i-i  ±x. 

banks    may,    in    his    discretion,    immediately    cause    the 

[166] 


STATE  BANKING  DEPARTMENT  §  138-139 


books,  papers  and  affairs  of  such  bank  to  be  examined  at 
the  expense  of  such  bank. 

Section  1  39.    It  shall  be  the  duty  of  the  board  of  direc-  Director*  to  exunine 

£  ,  ,  •  f    II  bank  affairs,  loans, 

tors  or  every  bank  to  examine  fully,  or  to  cause  a  com-  discounts,  etc. 
mittee  of  at  least  three  of  its  members,  none  of  whom 
shall  be  an  officer  of  the  bank,  to  examine  fully  into  the 
books,  papers  and  affairs  of  the  bank  of  which  they  are 
directors,  and  particularly  into  the  loans  and  discounts 
thereof,  with  a  special  view  to  ascertaining  the  value  and 
security  thereof,  and  of  the  collateral  security,  if  any 
given,  in  connection  therewith,  and  into  such  other  mat- 
ters as  the  superintendent  of  banks  may  require;  such 
examination  to  be  made  at  least  once  a  year,  but  no  such 
subsequent  yearly  examinations  shall  be  made  within 
three  months  of  the  next  preceding  examination.      Such  Directors  may  em- 

^,  1      11    1  1  1  P'°y  assistance  in 

directors  shall  have  power  to  employ  such  assistance  in  making  examination. 

making  such  examinations  as  they  may  deem  necessary. 

Within  thirty  days  after  the  completion  of  such  exami-  Swom  report  of  di- 

...  f  111  rectors  to  be  made 

nation,  a  report  in  writing  thereof,  sworn  to  by  the  direc-  and  filed  with  records 

of  bank. 

tors  making  the  same,  shall  be  made  by  the  board  of 
directors  of  such  bank,  and  placed  on  file  with  the 
records  of  said  bank,  and  shall  be  subject  to  examina- 
tion by  the  superintendent  of  banks. 

Such  report  shall  particularly  contain  a  statement  of  what  such  report 

shall  contain. 

the  assets  and  liabilities  of  the  bank  examined,  as  shown 
by  its  books,  together  with  any  deductions  from  the 
assets,  or  additions  to  liabilities,  w^hich  such  directors  or 
committee,  after  such  examination,  may  determine  to 
make.  It  shall  also  contain  a  statement,  in  detail,  of 
loans,  if  any,  which  in  their  opinion  are  worthless  or 
doubtful,  together  with  their  reasons  for  so  regarding 
them;  also  a  statement  of  loans  made  on  collateral  se- 
curity, which  in  their  opinion  are  insufficiently  secured, 
giving  in  each  case  the  amount  of  the  loan,  the  name  and 
market  value  of  the  collateral,  if  it  has  any  market  value, 
and  if  not,  a  statement  of  that  fact,  and  its  actual  value 

ri671 


§139  BLYTH,  WITTER  &  CO. 

as  nearly  as  possible.  Such  report  shall  also  contain  a 
statement  of  overdrafts,  of  the  names  and  amounts  of 
such  as  they  consider  worthless  or  doubtful,  and  a  full 
statement  of  such  other  matters  as  affect  the  solvency 
and  soundness  of  the  bank. 

If  directors  fail  to       If  the  directors  of  such  bank  shall  fail  to  make  such 

make  such  examina- 
tion or  report,  Supt.  examination  or  fail  to  cause  it  to  be  made,   or  shall  fail 

may  make  extra  ex- 
amination at  bank's  to  file  such  report  of  such  examination  in  the  manner  and 

expense. 

within  the  time  specified,  the  superintendent  of  banks 
shall  have  authority  to  make  or  cause  to  be  made  an 
extra  examination  of  such  bank,  at  the  expense  of  such 
bank. 

Whenever  the  board  of  directors  of  any  bank  may  de- 
termine by  resolution,  duly  entered  in  its  minutes,  that  a 
special  examination  shall  be  made  or  caused  to  be  made 
by  the  superintendent  of  banks  in  lieu  of  the  examina- 
tion herein  required  to  be  made  by  the  board  of  direc- 
tors of  such  bank,  a  certified  copy  of  such  resolution 
shall  be  transmitted  to  the  superintendent  of  banks, 
whereupon  it  shall  be  the  duty  of  the  superintendent  of 
banks  to  make  or  cause  to  be  made  a  special  examina- 
tion of  the  affairs  of  such  bank  in  lieu  of  the  examina- 
tion of  such  bank  by  the  board  of  directors  thereof.  Such 
special  examination  shall  be  made  at  such  time  as  the 
superintendent  of  banks  may  determine  but  in  any  event 
such  examination  shall  be  made  within  sixty  days  after 
the  receipt  by  the  superintendent  of  banks  of  the  resolu- 
tion hereinbefore  referred  to.  The  cost  of  making  such 
examination  shall  be  a  charge  against  the  bank  for  which 
such  examination  is  made. 

Upon  the  completion  of  such  examination  the  superin- 
tendent of  banks  shall  cause  a  report  thereof  in  writing 
to  be  prepared  and  delivered  to  the  board  of  directors 
of  such  bank  at  such  time  as  may  be  fixed  by  the  super- 
intendent of  banks,  but  not  later  than  thirty  days  after 
the  completion  of  such  examination. 

[1681 


STATE  BANKING  DEPARTMENT  §  139-140 


The  superintendent  of  banks  may  accept  in  lieu  of  the  when  examination 

^  _  .  •   1      1     r  by  Federal  Reserve 

directors'  examination  herein  provided  for  any  year  any  Bank  of  San  Fran- 
exammation,  made,  during  such  year,  by  the  ^ederal  Ke- 
serve  Bank  of  San  Francisco,  of  any  bank  which  is  a  mem- 
ber of  the  Federal  Reserve  Bank  of  San  Francisco. 

[Publishers'  note,  re  Section  139,  as  amended  1921: 

This  section  has  been  amended  by  adding  the  following:  "The  superintendent  of 
banks  may  accept  in  lieu  of  the  directors'  examination  herein  provided,  for  any 
year,  any  examination  made  during  such  year  by  the  Federal  Reserve  Bank  of 
San  Francisco  of  any  bank  which  is  a  member  of  the  Federal  Reserve  Bank."] 

Section   1  40.    The  superintendent  of  banks  shall  report  supt.  shall  make 

I  ir/-virl  L  annual  report  to 

during  the  month  or  October  or  each  year,  to  the  gov-  Governor. 
ernor,  for  submission  to  the  next  ensuing  session  of  the 
legislature: 

1 .  A  summary  of  the  state  and   condition   of   every  Such  annual  report 

•^  1  .    1  shall  contain: 

bank  required  to  report  to  him,  and  from  which  reports 
have  been  received  the  preceding  year,  with  an  abstract 
of  the  whole  amount  of  capital  returned  by  them,   the  sunimary  of  general 

^  conditions; 

whole  amount  of  their  debts  and  liabilities,  and  the  total 
amount  of  means  and  resources,  specifying  the  amount 
of  specie  held  by  them  at  the  time  of  the  last  report  to 
him,  and  such  other  information  in  relation  to  such  banks 
as,  in  his  judgment,  may  be  useful. 

2.  A  statement  of  all  banks  authorized  by  him  to  do  statement  of  new 

.11.  J    banks; 

business  during  the  previous  year,  with  their  names  and 
locations  and  dates  of  incorporation,  and  particularly 
designating  such  as  have  commenced  business  during 
the  year. 

3.  A  statement  of  the  banks  whose  business  has  been  statement  of  dosed 

banks; 

closed  during  the  year. 

4.  Any  amendments  to  the  banking  law,  which,  in  his  Desirable  amend- 

ments  to  Bank  Act; 

judgment,  may  be  desirable. 

5.  The  names  and  compensation  of  all  persons  em-  Name*  and  compen- 

f     .  .  J    sation  of  employees; 

ployed  by  him,  and  the  whole  amount  or  the  receipts  and 
expenses  of  the  department  during  the  year. 

1169] 


§  140-141  BLYTH,  WITTER  &  CO. 


Data  concerning       6.   The  namcs  of  banlcs  placed  in  his  hands  in  process 
iqui  a  ion.  ^^  liquidation,  and  the  amount  of  dividends  paid  thereon. 

Number  of  copies  of       Such  report,  and  the  usual  number  of  copies  for  the 

report  printed.  ,11.1  iiii  •  1  i-  !• 

use  of  the  legislature,  shall  be  prmted  and  in  readmess 
for  distribution  by  the  state  printer,  and  one  thousand 
copies  shall  be  printed  for  the  use  of  the  department, 
the  expense  of  which  shall  be  charged  among  the  gen- 
eral expenses  of  the  department. 

Weekly  bulletin  to       Section    141.       1 .   The  Superintendent  of  banks  shall 

be  publicly  posted  in  i/y-i  -ill-  IL 

Supt.'s  office,  keep  m  his  ornce,  in  a  place  accessible  to  the  general  pub- 
lic, a  bulletin  board  upon  which  he  shall  cause  to  be 
posted  at  noon  on  Friday  of  each  week  a  detailed  state- 
ment, signed  by  him  or,  in  case  of  his  absence  from  San 
Francisco  or  inability  to  act,  by  the  deputy  superintend- 
ent in  charge,  giving  the  following  items  of  general  in- 
contents  of  bulletin:  formation  with  regard  to  the  work  of  the  department 
since  the  preceding  statement: 


Applications  filed,  (a)  The  name  of  every  bank  that  has  filed  in  the 
banking  department  an  application  for  authorization  to 
commence  business,  its  location  and  the  date  of  filing 
such  application. 

New  banks  author-        (]-,)    'Yhe  name  and  location  of  every  bank  authorized 

ized.  ^     '  . 

by  the  superintendent  of  banks  to  commence  business, 
its  capital,  surplus,  and  the  date  of  authorization. 

Certificates  refused.  (c)  The  name  of  cvery  bank  to  which  a  certificate  of 
authorization  has  been  refused  by  the  superintendent  of 
banks,  and  the  date  of  notice  of  refusal. 

New  employees,  etc.  (d)  The  name  and  residence  of  every  person  ap- 
pointed by  the  superintendent  of  banks  as  a  deputy,  ex- 
aminer or  employee  in  the  banking  department,  the  title 
of  the  office  to  which  appointed,  the  compensation  paid, 
and  the  date  of  appointment. 

[1701 


STATE  BANKING  DEPARTMENT  §  1 4  I- 1 44 


(e)  The  date  on  which  a  call  for  a  report  by  banks  Data  concerning 
was  issued  by  the  superintendent  of  banks,  and  the  day  *"  '   ■^«P°'^t'' 
designated  as  the  day  with  reference  to  which  such  re- 
port should  be  made. 

(f)  The    name    and    location    of    every   bank    whose  concerning  banks 
creditors   or   depositors   have  been   paid   in   full   by   the  paid'lndVhose  "* 

•     .i.ril  1  .•  ri  1        itockholders  have 

supenntendent  ot  banks  and  a  meetmg  or  whose  stock-  called  meeting,  etc. 
holders   shall   have  been   called,    together   with   date   of 
notice  of  meeting  and  date  of  meeting. 

(g)  The  name  and  location  of  every  bank  subject  to  Banks  liquidated 
the  banking  law  whose  affairs  and  business  shall  have    ^  "^"'  *  '"*" 
been  finally  liquidated,  or  in  course  of  liquidation. 

(h)    The  name  and  location  of  every  bank  which  has  proposed  changes  in 
applied  for  approval  of  a  change  of  name,  and  the  name  °'™* 
proposed. 

2.    Every  such  bulletin,   after  having  been   posted   as  Bulletins  after  being 
aforesaid  for  one  week,  shall  be  placed  on  a  file  for  such  oX^e.**  *°  ^'  ^"^^ '° 
statements,  to  be  kept  in  the  office  of  the  superintendent 
of  banks.    All  such  statements  shall  be  public  documents, 
and  at  all  reasonable  times  shall  be  open  to  public  in- 
spection during  usual  banking  hours. 

Section  1  42.     None  of  the  records  of  the  state  banking  Records  of  state 

I  LIIII  11  11-1  Banking  Dept.  not 

department  siiail  be  deemed  to  be  public  documents  nor  deemed  pubUc  docu- 

hii  fi  ii  i.  -fi         ments,  or  open  to 

all  any  or  such  records  be  open  to  the  mspection  or  the  public  inspection. 

public.      Every  official  report  made  by  the  superintend- 
ent of  banks  and  every  report  duly  verified   of  an  ex-  supt.s  reports,  etc., 

■^  -^  •'  to  be  prima  facie 

amination   made,   shall   be  prima   facie   evidence   of   the  «''<ience  in  court, 
facts  therein  stated,  for  all  purposes  in  any  action  or  pro- 
ceedings wherein  the  superintendent  of  banks  is  a  party. 

(Section   143.     Repealed   1913.) 

Section    144.      Whenever  by  the  terms  of  this  act  a  Penaitie- and  for- 

feituree  imposed  by 

penalty  or  forfeiture  is  imposed,  the  same  shall  be  recov-  Act— how  recovered. 
ered  in  an  action  brought  at  the  request  of  the  super- 

[171] 


§  144-145  BLYTH.  WITTER  &   CO. 

intendent  of  banks  by  the  attorney  general,  in  the  name 
of  the  people  of  the  state,  and  the  sum  recovered  shall 
be  paid  into  the  state  banking  fund  and  used  in  pay- 
ment of  claims  against  the  said  fund.  Any  fine  or  pe- 
When  fine  or  penalty  cuniary  penalty,  which  may  be  incurred  by  any  bank  on 

may  be  compromised  c     i  .     <       .  r  .    ,  r     i  • 

with  Supt.  account  or  the  violation  or  any  provision  or  this  act,  may 
be  compromised  and  a  less  amount  than  that  prescribed 
by  this  act  accepted  by  the  superintendent  of  banks  at 
any  time  prior  to  the  institution  of  action  to  recover  the 
same. 

Powers,  duties,  etc.,       Section    145.      The  powers,   privileges,   duties  and  re- 

of  corporations  doing  .      .  r  i  i     •  i 

business  under  laws  strictions  conrerred  and  imposed  upon  any  corporation 

abridged,  enlarged,'  or  individual  existing  and  doing  busines  under  the  laws 

Act.  of  this  state  are  hereby  abridged,   enlarged  or  modified 

as  each  particular  case  may  require  to  conform  to   the 

provisions  of  this  act,   notwithstanding  anything  to   the 

contrary  in  their  respective  articles  of  incorporation  or 

Act  applies  equally  a  ii      i  •    •  r     i   •  .      l      il  l  -^L 

to  all  corporations  charters.     All  the  provisions  or  this  act  shall  apply  with 

now  or  hereafter  do-  -i       rr  ii  •  l-L 

ing  banking  business  equal  force  and  effect  to  all  corporations  which  are  now 

in  this  State  unless  rill'L- 

excepted  herein,  and  doing  or  which  may  hereafter  do  a  banking  business  m 

to  other  persons,  .  , 

firms,  etc.,  violating  this  State,  except  where  express  exception  or  exemption 

Act  and  subject  to  ,  ,      ,  .  ,  ,  , 

its  penalties,  may  be  made  herein,  and  to  such  other  persons,  associa- 
tions, copartnerships  or  corporations  who  shall,  by  violat- 
ing any  of  its  provisions,  become  subject  to  the  penalties 
Legality  of  prior  provided  herein.     The  legality  of  investments  heretofore 
t?t°enor^rtedb;  Hiade,  or  tide  to  property  heretofore  acquired  or  con- 
i^g^'n'^strnts  mal;  veyed  through  transactions  heretofore  had  by  any  bank 
^"°'  to  bf ^I'dS  pursuant  to  any  provision  of  law  in  force  when  such  in- 
'^*off1o"^nfTrm  to  vestments  were  made  or  transactions  had,  shaU  not  be 
Act,  etc.  aflfected  by  the  provisions  of  this  act,  except  that  any 
such  investments  made  prior  to  July  1,  1909,  when  not 
complying  with  the  provisions  hereof,  shall  be  changed 
to  conform  hereto;  but  such  change  shall  be  made  grad- 
ually and  in  such  manner  as  to  prevent  loss  or  embaur- 
rassment  in  the  business  of  such  bank,  or  unnecessary 
loss  or  injury  to  the  borrowers  on  such  security;  pro- 

[1721 


STATE  BANKING  DEPARTMENT §  145-147 

vided,  that  the  legality  of  any  investments  heretofore 
lawfully  made,  pursuant  to  the  provisions  of  this  act  as 
it  existed  on  and  subsequent  to  July  1,  1909,  shall  not  be 
affected  by  the  provisions  of  this  section. 

Section  146.     All  acts,  or  parts  of  acts,  in  conflict  with  aii  conflicting  aeu, 
this  act  are  hereby  repealed. 

Section  147.     This  act  shall  take  effect  July  first,  1  909. 

[Publishers'  general  note: 
Sections  amended  in  effect  June  3,  1921.] 


[173] 


Statutes  of   1909: 
Chapter     76,  Approved  March  I.  In  effect  July  1,   1909, 

Amended  by  Statutes   of    1911: 

Chapter      1  1 ,  Approved  Feb.  6.  In  effect  Feb.  6,  1911. 

Chapter  488,  Approved  Apr.  21.  In  effect  June  20,  1911. 

Chapter  494,  Approved  Apr.  21.  In  effect  June  20,   1911. 

Chapter  495,  Approved  Apr.  21.  In  effect  June  20,   I  9  II. 

Amended  by  Statutes  of  1911    (Special  Session): 

Chapter  2,  Approved  Dec.  18.  In  effect  Feb.  16,1912. 
Chapter     24,  Approved  Dec.    24.       In  effect  Feb.    22.1912. 

Amended   by  Statutes   of    1913: 

Chapter  104,  Approved  May  6.  In  effect  Aug.  I  0,  1  9  1  3. 
Chapter  192,  Approved  May    31.       In  effect  Aug.    10,1913. 

Amended  by  Statutes   of    1915: 

Chapter  I  40,  Approved  Apr.  28. 

Chapter  608,  Approved  June  3. 

Chapter  611,  Approved  June  3. 

Chapter  6  1  2,  Approved  June  3. 

Amended   by  Statutes   of   1917: 

Chapter  500,  Approved  May  17.  In  effect  July  27,1917. 
Chapter  501,  Approved  May  17.  In  effect  July  27.1917. 
Chapter  504,  Approved  May     17.       In  effect  July    27,1917. 

Amended   by   Statutes   of    1919: 

Chapter  140,  Approved  May  3.  In  effect  July  22.1919. 
Chapter  337.  Approved  May     15.       In  effect  July    22.1919. 

Amended  by  Statutes  of  1921: 

Chapter  780,  Approved  June    3.  In  effect  June     3.1921. 

Chapter  1  74,  Approved  May   18.         In  effect  July    29,  1921. 


In  effect  Aug. 

7. 

1915 

In  effect  Aug. 

7, 

1915 

In  effect  Aug. 

7, 

1915 

In  effect  Aug. 

7, 

1915 

[175] 


INDEX  TO  APPENDIX 


Section  1273  of  the  Code  of  Civil  Procedure. 

Section  12  73  of  the  Code  of  Civil  Procedure,  referred  to  in  Sec. 
1 5  of  the  Bank  Act — relating  to  procedure  by  which  un- 
claimed deposits  escheat  to  the  State. 

Section  1454  of  the  Code  of  Civil  Procedure 
Section  1454  of  the  Code  of  Civil  Procedure,  granting  to  certain 
surviving  heirs  of  a  deceased  depositor  the  privilege  of  with- 
drawing a  sum  not  greater  than  $1,000  if  that  sum  is  ag- 
gregate of  all  decedent's  deposits — said  section  being  re- 
ferred to  in  the  note  to  Sec.    I  6  repealed   1919. 

Section   1278  of  the  Code  of  Civil  Procedure. 

Section  1278  of  the  Code  of  Civil  Procedure,  relating  to  change 
of  name  of  a  banking  corporation, — referred  to  in  publishers' 
note  following  Sec.    127  of  the  Bank  Act. 

Extracts  from  Chapter  VIII  of  Title  II  of  Part  IV  of  Division  First 
of  the  Civil  Code. 

Extracts  from  Chapter  VllI  of  Title  11  of  Part  IV  of  Division  First 
of  the  Civil  Code,  referred  to  in  Sections  61,  96  and  99  of 
the  Bank  Act,  relating  to  mortgage  insurance  and  mortgage- 
participation   certificates. 

Penal  Code  Sections  561,  561a,  561b,  561c,  561d  and  563a 
and  563b. 
Penal  Code  Sections  561,   561a,   561b.   561c,   56  Id  and  563a  and 
563b,  relating  to  frauds  in  the  management  of  banks. 

General  Laws,  Statutes  of  1921,  Chapter  772.     Approved 
June  23,  1921. 

General  Laws,  Chapter  772,  Statutes  1921,  being  "An  act  defin- 
ing corporations  for  the  purpose  of  engaging  in  international 
or  foreign  banking  or  other  international  or  foreign  financial 
operations  or  in  banking  or  other  financial  operations  in  a 
dependency  or  insular  possession  of  the  United  States,"   etc. 

General  Laws,  Chapter  496,  Statutes  1917. 

General  Laws,  Chapter  496,  Statutes  1917,  relating  to  the  liquida- 
tion of  banks, — referred  to  in  note  to  Sec.    136  of  Bank  Act. 

General  Laws,  Statutes  1907,  Chapter  522.    Approved  March  23, 

1907,  as  amended  by  Statutes  of  1921,  Chapter  785. 

Approved  June  3,    1921. 

Being  "An  act  to  provide  for  and  regulate  the  deposit  of  county 
and  municipal  moneys  in  banks  and  banking  corporations, 
limiting  the  amount  of  public  moneys  that  may  be  deposited 
therein,  and  providing  a  penalty  for  the  illegal  deposit  and 
use  thereof."  Statutes  of  1907,  Chapter  522;  approved  March 
23,  1907,  as  amended  by  Statutes  of  1921,  Chapter  785;  ap- 
proved June  3,    1921. 

[177] 


§  1273  C.  C.  P.  BLYTH,  WITTER  &   CO. 


APPENDIX 


Section  1273  of  the  Code  of  Civil  Procedure. 

Section  1273  of  the  Code  of  Civil  Procedure,  referred  to  in  Sec. 
1 5  of  the  Bank  Act — relating  to  procedure  by  which  un- 
claimed  deposits  escheat  to   the  State. 

Bank  deposits  not        1273.     All  amounts  of  moncy  heretofore  or  hereafter 

drawn  on  or  claimed     _  •i-i  ii  i  i-ri  •  l_ 

for  more  than  20  deposited  With  any  bank  to  the  credit  or  depositors  who 

years,   where  resi-   ,  i  i  •  •  i  •  l     l 

dence  cf  depositor  havc  not  made  a  deposit  on  said  account  or  withdrawn 

or  claimant  not  i  ,  ,.  ii-iliil_ 

filed  with  bank,  any  part  thereor  or  the  interest  and  which  shall  have  re- 
mained unclaimed  for  more  than  twenty  years  after  the 
date  of  such  deposit,  or  withdrawal  of  any  part  of  prin- 
cipal or  interest,  and  where  neither  the  depositor  or  any 
claimant  has  filed  any  notice  with  such  bank  showing  his 
or  her  present  residence,  shall,  with  the  increase  and 
Attorney  General  to  proceeds   thereof,    escheat  to   the  state.      Whenever   the 

commence  action  i       i      n    i         •     r  if  l        l  •  1_ 

against  depositary  attorney  general  shall  be  inrormed  or  such  deposits,   he 

bank  and  depositors      ,      ,,  .  .  .         i  /•     i 

to  obtain  judgment  shall  Commence  an  action  or  actions  m  the  name  or  the 

of  escheat  to^  r  r^    t-r  -        •        y  •  e  \  c 

State,  btate  or  California,  in  the  superior  court  ror  the  county  or 
Sacramento,  in  which  shall  be  joined  as  parties  the  bank 
or  banks  in  which  the  moneys  are  deposited  and  the 
names  of  all  such  depositors.  All  or  any  number  of  de- 
positors or  banks  may  be  included  in  one  action.  Service 
of  process  in  such  action  or  actions  shall  be  made  by  de- 
livery of  a  copy  of  the  complaint  and  summons  to  the 
president,  cashier  or  managing  officer  of  each  defendant 
bank,  and  by  publication  of  a  copy  of  such  summons  in 
a  newspaper  of  general  circulation  published  in  said 
county  for  a  period  of  four  weeks.  Upon  the  trial  the 
court  must  hear  all  parties  who  have  appeared  therein 
and  if  it  be  determined  that  the  moneys  deposited  in  any 
defendant  bank  or  banks  are  unclaimed  as  hereinabove 

[178] 


APPENDIX §  1273  C.  C.  P. 

stated,  then  the  court  must  render  judgment  in  favor  of 
the  state  declaring  that  said  moneys  have  escheated  to 
the  state  and  commanding  said  bank  or  banks  to  forth- 
with deposit  all  such  moneys  with  the  state  treasurer,  to 
be  received,  invested,  accounted  for  and  paid  out  in  the 
same  manner  and  by  the  same  officers  as  is  provided  in 
the  case  of  other  escheated  property. 


[1791 


§  I454C.  C.  p. BLYTH.  WITTER  &  CO. 

Section  1454  of  the  Code  of  Civil  Procedure 

Section  1454  of  the  Code  of  Civil  Procedure,  granting  to  certain 
surviving  heirs  of  a  deceased  depositor  the  privilege  of  with- 
drawing a  sum  not  greater  than  $1,000  if  that  sum  is  ag- 
gregate of  all  decedent's  deposits — said  section  being  re- 
ferred to  in  the  note  to  Sec.    1  6  repealed    1919. 

heirs ^ofXJeased       '^^  surviving  husband  or  wife  or  the  guardian  of  the 
depositor  may.with-  estate  of  any  insane  or  incompetent  husband  or  wife,  of 

out  aatninistration,  ^  *- 

collect  of  bank  de-  anv  deceased  person,  or  if  no  husband  or  wife  is  living, 

posits  of  decedent         ^  •■  o 

not  exceeding  $1000.  then  the  children,  or  the  guardian  of  the  estates  of  any 
minor  or  insane  or  incompetent  children  of  said  deceased, 
or,  if  no  children  are  living,  then  the  father  or  mother  or 
guardian  of  the  estate  of  any  insane  or  incompetent 
father  or  mother  of  such  decedent,  and  if  neither  the 
father  nor  mother  is  living,  then  the  brothers  and  sisters 
or  the  guardian  of  the  estates  of  any  minor  or  insane  or 
incompetent  brothers  and  sisters  of  such  decedent,  may, 
without  procuring  letters  of  administration,  collect  of  any 
bank  any  sum  which  said  deceased  may  have  left  on  de- 
posit in  such  bank  at  the  time  of  his  or  her  death;  pro- 
vided, such  deposits  shall  not  exceed  the  sum  of  one 
thousand  dollars. 

Bank  upon  receivinf       Any  bank,  upon  receiving  an  affidavit  stating  that  said 

affidavit  stating  -f  .,,  iirr-  -i  ••  l 

certain  specified  depositor  IS  dead,  and  that  afnant  is  the  surviving  hus- 

facts,  may  pay  such 

deposit*,  band  or  wife  or  the  guardian  of  the  estate  of  an  insane 
or  incompetent  surviving  husband  or  wife,  as  the  case 
may  be,  of  said  decedent,  or  stating  that  decedent  left 
no  husband  or  wife,  and  that  affiant  is  the  child,  or  that 
affiants  are  the  children,  or  the  guardians  of  the  estates 
of  the  minor,  insane  or  incompetent  children,  as  the  case 
may  be,  of  said  decedent,  or  stating  that  decedent  left 
neither  husband,  wife  nor  children,  and  that  affiant  is  the 
father  or  mother,  or  the  guardian  of  the  estate  of  the  in- 
sane or  incompetent  father  or  mother,  as  the  case  may  be, 
of  said  decedent,  or  stating  that  the  decedent  left  neither 
husband,  wife,  children,  father  nor  mother,  and  that 
affiants  are  the  brothers  and  sisters,  or  the  guardians  of 
the  estates  of  the  minor,  insane  or  incompetent  brothers 

[180] 


APPENDIX  §1454C.  C.  P. 


and  sisters,  as  the  case  may  be,  of  said  decedent,  and  that  whou  amount  left 

,      .       by  decedent  in  any 

the  whole  amount  that  said  decedent  left  on  deposit  m  and  all  bank,  of 

J    State  not  to  exceed 

any  and  all  banks  of  deposit  in  this  state,  does  not  exceed  »iooo. 
the  sum  of  one  thousand  dollars,  may  pay  to  said  affiant 
or  affiants  any  deposit  of  said  decedent,  if  the  same  does 
not  exceed  the  sum  of  one  thousand  dollars,  and  the  re- 
ceipt of  such  affiant  or  affiants  is  sufficient  acquittance 
therefor. 


181] 


§  1278C.  C.  p. BLYTH.  WITTER  &  CO. 

Sec.  1278,  Code  of  Civil  Procedure 

Section  1278  of  the  Code  of  Civil  Procedure,  relating  to  change 
of  name  of  a  banking  corporation,  referred  to  in  publishers 
note  following  Sec.    127  of  the  Bank  Act. 

Said  Section  1278  appears  in  Title  IX  of  Part  III  of  the  Code  of 
Civil  Procedure.  This  Title  embraces  Sections  1275-1279  of  said 
Code,  and  covers  the  subject,   "Of  Change  of  Names." 

Said  Title  IX,  after  providing  that  applications  for  change  of 
name  must  be  heard  and  determined  in  the  Superior  Court,  and 
prescribing  various  steps  to  be  taken  in  the  institution  and  prose- 
cution of  an  application  of  this  kind,  goes  on  in  Section  1278  to 
provide  as  follows: 

Proceedingrs  at  hear-       Section  1  278.     Such  application  must  be  heard  at  such 

ing  in  court  on  •  l        i    •         •  L. 

application  for  time  as  the  court  may  appoint,  and  objections  may  be 

change  of  name  of_,,,  ,  .  l.'L*-  Li. 

corporation,  filed  by  any  person  who  can,  in  such  objections,  show  to 

the  court  good  reason  against  such  change  of  name.     On 

the  hearing,  the  court  may  examine  on  oath  any  of  the 

petitioners,  remonstrants,  or  other  persons,  touching  the 

application,  and  may  make  an  order  changing  the  name, 

or  dismissing  the  application,  as  to  the  court  may  seem 

right  and  proper;  provided,   that  if  the  applicant  for  a 

change  of  name  be  a  corporation,   such  applicant  shall 

file  in  court  at  the  time  of  hearing  the  application,   the 

certificate  of  the  secretary  of  state  that  the  name  desired 

to  be  used  by  the  applicant,  is  not  the  corporate  name 

of  any  corporation  existing  at  said  time,  and  that  said 

name  does  not  so  closely  resemble  the  name  of  any  such 

Banking  corporation  existing  Corporation  as  will  tend  to  deceive ;   provided, 

ceTiflcate  of  supt.  further,  that  if  the  applicant  for  a  change  of  name  be  a 

desired  to\e°us"d  banking  corporation,  such  applicant  shall  file  in  court  at 

to  name^ofVxiS  the  time  of  hearing  the  application,  the  certificate  of  the 

^^^^'  superintendent  of  banks  that  the  name  desired  to  be  used 

by  the  applicant  does  not  resemble  so  closely  as  to  be 

likely  to  cause  confusion,   the  name  of  any  other  bank 

previously  formed  under  the  laws  of  this  state. 


[182] 


APPENDIX  Mortgage  Insurance 


MORTGAGE  INSURANCE. 
Extracts  from  Chapter  VIII  of  Title   II   of  Part  IV   of 

_,      ,  f    r^    -t   c  •  •        1    "Mortgage  incur- 

Division  First  of  the  Civil  Code  of  California  as  revised  ance." 
and  amended;  Approved  June   12,    1915. 

Referred  to  in  paragraph  (e)  of  Subdivision  5  of  Sec- 
tion 61,  also  in  Subdivision  (d)  of  Sec.  96,  and  in  Sec. 
99  of  the  Bank  Act. 

CHAPTER  VIII. 
MORTGAGE  INSURANCE. 

Sec.  453aa.  Mortgage  insurance  companies  subject  to  insurance 
laws  and  the  authority  of  insurance  commis- 
sioner. 

453bb.  Mortgage  insurance  company  defined.  The  term 
"security"  as  used  in  this  chapter  defined.  Policy 
of  mortgage  insurance  defined.  Mortgage  par- 
ticipation certificate  defined.  Entire  mortgage 
guaranty   defined. 

453cc.  Requisite  capital  stock  of  mortgage  insurance  com- 
pany; certificate  of  authority  required.  Kind 
and  amount  of  securities  that  may  be  guaran- 
teed. Policies  of  mortgage  insurance  do  not 
constitute  "debts"  or  "indebtedness"  of  issuing 
company.  Can  not  invest  in,  hold  or  own  capi- 
tal stock  of  another  corporation,  except  as  pro- 
vided herein. 

453dd.  Must  accumulate  a  surplus.  Restriction  on  making 
of  dividends. 

453ee.    Investments  permitted. 

453ff.  Mortgage  participation  certificates  and  guaranteed 
securities  made  legal  investments  for  trust 
funds,    insurance    companies    and    others. 

453gg.    Quarterly   reports  to  insurance  commissioner. 

453aa     Everv   mortgage  insurance  company  shall   be  Mortgage  insurance 

^  ^  o    o  ,,1  .  c   companies  subject 

subiect  to  and  shall  comply  with  all  the  requirements  ot  to  insurance  laws 

•»  111  •  and  authority  of 

the  laws  of  this  state  made  applicable  to  msurance  com-  insurance  commu- 


panies  generally  and  the  rules  and  regulations  of  the  in- 
surance department  of  this  state,  excepting  in  so  far  as 
said  laws,  rules  or  regulations  may  be  inconsistent  with 
the  other  provisions  in  this  chapter  contained;  and  the 
insurance  commissioner  shall  have  the  same  power  and 
authority   over  such   company   that   he   may   exercise   in 


sioner. 


1831 


Mortgage  Insurance BLYTH.   WITTER   &    CO. 

relation  to  other  insurance  companies,  including  the  right 
to  examine  and  inspect  the  financial  condition  and  affairs 
of  such  company  relating  to  the  business  of  such  com- 
pany, and  to  compel  compliance  with  the  provisions  of 
law  governing  any  such  company. 

Definitions:  "Mort-       453bb.   The  term  "mortgage  insurance  Company"  shall 

gage  insurance  _      _  .  _ 

company."  include  every  association,  corporation,  firm  or  person 
who  shall  engage  as  a  business  in  making  and  issuing 
policies  of  mortgage  insurance. 

"Security."  The  term  "security"  wherever  used  in  this  chapter, 
without  a  different  meaning  being  specified  or  made  ap- 
parent, shall  be  construed  to  refer  to  and  include  within 
its  meaning  a  note  or  notes,  or  bond  or  bonds,  together 
with  the  mortgage  or  deed  of  trust  securing  the  same 
which  evidence  a  debt  secured  by  a  first  lien  on  a  market- 
able title  in  fee  to  real  estate,  or  to  real  estate  with  im- 
provements thereon. 

"Policy  of  mort-       Any  contract  made  and  issued  by  a  mortgage  insurance 

gage  insurance."  ,  , 

company  which  purports  to  guarantee  or  msure  agamst 
loss  on,  or  to  guarantee  the  payment  of,  within  a  specified 
time,  the  whole,  or  any  part,  of  the  principal,  interest  or 
other  sums  agreed  to  be  paid  under  the  terms  of  any 
security,  or  other  sums  secured  under  the  terms  of  any 
security,  shall  be  deemed,  and  is  hereby  designated,  a 
"policy  of  mortgage  insurance." 

"Mortgage  partioipa-       A  policy  of  mortgage  insurancc  which  evidences  the 

tion  certificate."  i   .       i  i         .  i        #•  !•     •  i      i  i_ 

ownership  by  the  msured  or  an  undivided  or  other  par- 
tial share  or  interest,  or  the  right  to  participate  to  a  speci- 
fied extent,  in  a  security,  or  in  a  group  consisting  of  sev- 
eral securities,  and  purports  to  guarantee  the  payment  of 
such  securities,  or  the  pajonent  of  such  undivided  or 
other  partial  share  or  interest  therein,  or  the  amount  of 
such  participation,  may  be  referred  to  as,  and  is  hereby 
designated,  a  "mortgage  participation  certificate." 

"Entire  mortgage  a  i*  r  .  •  •.!_  i.L  m. 

guaranty."       A  policy  ot  mortgage  insurance,   other  than  a  mort- 

[184] 


APPENDIX  Mortgage  Insurance 


gage  participation  certificate,  which  covers  and  refers  to 
the  entire  indebtedness  evidenced  by  a  security,  may  be 
referred  to  as,  and  is  hereby  designated,  an  "entire  mort- 
gage guaranty." 


453ff.    Mortgage  participation  certificates,   also  securi-  Mortgage  participa- 

f^    o       ^  '^  ^  tion  certificates,  and 

ties  guaranteed  by  policies  of  mortgage  insurance  issued  certificates  puaran- 

1   .  1  1111         ***^  ^^  policies  of 

in  conformity  with  the  provisions  of  this  chapter  shall  be  mortsage  insurance. 

legal  investment 

legal  investments  for  all  trust  funds  held  by  any  executor,  for  trust  funds  and 

,       .  funds  of  banks, 

administrator,  guardian,   trustee  or  other  person  holdmg  trust  companies, 
trust  funds,  also   for  the  funds  of  insurance  companies, 
banks,  banking  institutions  and  trust  companies,  and  shall 
be  accepted  by  the  State  of  California,   its  officers  and 
officials,  as  securities  comprising  any  part  of  any  fund  or 
deposit  required  by  law  to  be  made  with  the  State  of 
California,  or  any  officer  or  official  thereof,  by  any  trust 
company   or   insurance   company  doing   business   in    the 
State  of  California,  and  all  premiums  required  to  be  paid 
according  to  the  terms  of  any  such  mortgage  participation 
certificate,   or  other  policy  of  mortgage  insurance,   may 
be  charged  to  or  paid  out  of  the  income  from  the  note  or 
notes  or  bond  or  bonds  covered  thereby;  provided,  that  ^rs^e^c^'app'^otiy"" 
the  foregoing  provisions  of  this  section,  in  so  far  as  they  ^^  ^^^^^^p^^^^'f^;'*" 
refer  to   mortgage   participation   certificates,    shall   apply  '^^^^^^  "i"'"" 
only  to  such  mortgage  participation   certificates  as   evi- 
dence the  ownership  of  shares  or  interests  in,  or  participa- 
tion in,   securities  which   shall  have  been  assigned   to   a 
trust  company  organized  and  doing  business  under   the 
laws  of  and  within  this  state  and  shall  be  held  by  such 
trust  company  for  the  common  and  equal  benefit  of  the 
holders   of  all   mortgage  participation   certificates   issued 
or  to  be  issued  evidencing  the  ownership  of  shares  or  in- 
terests in,   or  participation   in,   any  particular  security  or 
group  of  securities  so   assigned  and   such   trust,   and   the 
administration  thereof,  shall  at  all  times  be  and  hereby  is 
expressly  made  subject  to  the  inspection,  supervision  and 

M851 


Mortgage  Insurance  BLYTH.    WITTER   &    CO. 


control  of  the  superintendent  of  banks  as  fully  and  com- 
pletely as  if  the  same  constituted  a  court  trust  under  the 
Each  certificate  provisions   of   the   Bank   Act;   provided   also,    that   each 
with  certificates  and  such    mortgage    participation    certificate    must    bear    the 
appraisemen^^a   ^gj,j.j^j,^jg  ^f  such  trust  Company  to  the  effect  that  the 
aggregate  amount  of  mortgage  participation  certificates 
then  outstanding,  including  both  the  one  being  certified 
and  all  others  based  on  the  same  security  or  group  of 
securities,    does   not   exceed    the   amount   of   the   unpaid 
principal  of  the  debt  or  debts  evidenced  by  such  particu- 
lar security  or  group   of  securities;   provided   also,    that 
each  security  so  assigned  shall  be  accompanied  by  a  copy 
of  the  appraisement  and  of  the  certificate  of  the  directors 
filed  or  to  be  filed  with  the  insurance  commissioner  as 
required  by  the  provisions  of  this  chapter;  provided  also, 
Copy  of  appraise-  that  a  copy  of  each  such  appraisement  and  accompany- 

ment,  certificate,  ._  r      i  t  i      n    i  il 

etc.,  to  he  trans-  ing  Certificate  of  the  directors  shall  be  promptly,  upon 
the  assignment  of  each  such  security,  transmitted  to  the 
superintendent  of  banks,  and  that  each  such  copy  of  ap- 
praisement so  transmitted  shall  bear  an  endorsement  or 
certificate  executed  by  the  trust  company  to  which  each 
such  security  is  so  assigned  reciting  and  setting  forth  the 
amount  of  the  unpaid  principal  named  in  the  security 
which  covers  the  property  described  in  such  appraise- 
First-iien  require-  ment;  provided  also,  that  if  any  such  mortgage  participa- 

ments,  as  to  certifi-     .  .-  ...  il'L  !••_£ 

cates  covered  by  this  tion  Certificates,    or  securities  guaranteed   by  policies  or 

chapter,  if  used  as  .  •  ^    •  c  •,.  •i.l.    mX. ^.1 

part  of  fund  or  de-  mortgage  insurance  issued  in  conrormity  with  the  provi- 

^^^^plny,  ^th  st^e  sions  of  this  chapter,  are  used  as  securities  comprising  any 

Treasurer.  ^^^^  ^£  ^^^  j^^j  ^^  deposit  required  by  law  to  be  made 

with  the  state  treasurer  by  a  trust  company,  the  securities 
so  guaranteed  or  the  ownership  of,  or  participation  in, 
which  is  evidenced  by  such  participation  certificates  must 
constitute  a  first  lien  on  improved  and  productive  real  es- 
tate in  the  State  of  California,  such  improved  real  estate 
being  worth  at  least  double  the  amount  of  such  lien;  and 
also  that  the  real  estate  and  improvements  which  are  cov- 
ered by  the  lien  of  any  security  so  guaranteed  or  the  own- 

[1861 


APPENDIX  Mortgage  Insurance 


ership  of,  or  participation  in,  which  is  evidenced  by  mort- 
gage participation  certificates  which  are  so  used  shall  be 
reappraised  at  least  once  every  two  years  and  in  the 
manner  in  this  chapter  provided  for  appraisements,  and 
a  copy  of  each  such  reappraisement  shall  be  filed  w^ith 
the  trust  company  to  which  such  security  shall  have  been 
assigned  and  the  original  of  each  such  reappraisement 
bearing  the  endorsement  or  certificate  of  such  trust  com- 
pany as  to  the  amount  of  the  unpaid  principal  named  in 
such  security  shall   be   filed   with   the   superintendent   of  Legality  of  prior 

•'  certificates  ■which 

banks;  provided,  further,  that  the  legality  or  validity  of  were  valid  when 

*^  ....  issued,  not  impaired 

entire  mortgage  guaranties  and  mortgage  participitation  by  this  chapter. 
certificates  heretofore  issued  which  fully  conform  to  and 
comply  with  the  law  in  force  at  date  of  issuance  shall  not 
be  affected  or  impaired  by  the  provisions  of  this  chapter 
and  such  entire  mortgage  guaranties  and  mortgage  par- 
ticipation certificates  shall  continue  to  be  legal  invest- 
ments and  recognized  for  all  purposes  to  the  extent  and 
in  the  manner  provided  by  the  law  in  force  at  date  of 
such  issuance. 

A  mortgage  insurance  company  which  issues  mort-  ^^^^^l^^^^^Z'^hich 
gage  participation  certificates  in  accordance  with  the  P^^^'^j^P^ed— cond^' 
provisions  of  this  section  may  at  any  time  and  from  time  tions  governing. 
to  time  substitute  for  any  security  or  securities  comprising 
or  constituting  a  part  or  parts  of  a  group  of  securities,  the 
ownership  of,  or  participation  in,  which  is  evidenced  in 
whole  or  in  part  by  any  such  participation  certificates, 
other  securities  similarly  guaranteed  by  it  and  withdraw 
from  the  trust  company  the  security  or  securities  for 
which  such  substitution  shall  be  made;  provided,  how- 
ever, that  at  all  times  the  amount  of  the  unpaid  principal 
of  the  debts  evidenced  by  the  particular  group  of  securi- 
ties held  by  such  trust  company  and  affected  by  any  such 
substitution  shall  not  be  less  than  the  aggregate  amount 
of  the  participation  certificates  theretofore  issued  then 
outstanding  and  evidencing  the  ownership  of  undivided 
or  other  partial  shares  or  interests,    or  participation,   in 

[187] 


Mortgage  Insurance BLYTH.   WITTER   6c    CO. 

Substitution  in  such  group  of  Securities;  and  provided  further,   that  the 

securities  on  which  i-i.-i  -ir  'ii  ii 

participation  certifi-  right  of  Substitution  hereinbefore  provided  and  the  exer- 

cates  based — condi-  iriii  i  rr  i  ri_ 

tions  governing—  cise  thereof  shall  not  alter  or  afreet  the  status  of  such 

Continued.  ._  i  i     •  r 

participation  certihcates  as  legal  investments  tor  trust 
funds,  insurance  companies,  banks,  banking  institutions 
and  trust  companies  as  hereinbefore  provided,  or  as 
securities  acceptable  by  the  State  of  California,  its  officers 
and  officials,  as  comprising  or  constituting  any  fund  or 
deposit,  or  any  part  thereof,  required  by  law  to  be  made 
with  the  State  of  California,  or  any  officer  or  official 
thereof,  by  any  trust  company  or  insurance  company 
doing  business  in  the  State  of  California. 


[188] 


APPENDIX  Penal  Coda 


PENAL  CODE. 

RELATING  TO  FRAUDS  IN  THE  MANAGEMENT 
OF  BANKS. 

Penal  Code  Sections  561,  561a,  561b,  561c,  561d  and  563a 
and  563b. 

Section  561.      An  officer,   director,  agent,  teller,  clerk  Bank  officer,  direc- 
tor, etc.,  over- 

or  employee  of  any  bank,  who,  either  drawing  or  permit- 

^      •'  •'  ting  overdraft,  or 

1 .  Knowingly  overdraws  his  account  with  such  bank  "on  l^  procure- 

,,,,..  .  CJC  ment,  etc.,  of  bank 

and  thereby  obtains  the  money,   notes  or  tunds  ot  any  lo^n  etc.,  guilty 

,11  of  felony 

such  bank;  or 

2.  Asks  for,  receives,  or  consents  or  agrees  to  receive, 
any  commission,  emolument,  gratuity  or  reward,  or  any 
promise  of  any  commission,  emolument,  gratuity  or  re- 
ward, or  any  money,  property  or  thing  of  value  or  of 
personal  advantage  for  procuring  or  endeavoring  to  pro- 
cure for  any  person,  firm  or  corporation,  any  loan  from, 
or  the  purchase  or  discount  of  any  paper,  note,  draft, 
check  or  bill  of  exchange  by  any  such  bank,  or  for  per- 
mitting any  person,  firm  or  corporation  to  withdraw  any 
account  with  such  bank,  is  guilty  of  a  felony. 

Section  561a.     Any  officer,  director,  trustee,  employee  Misappropriation. 

•^  etc.,  by  bank  airec- 

or  agent  of  any  bank  in  this  state,  who  abstracts  or  wil-  ^^j^fJ^P^^^*®'  ***=• 
fully  misapplies  any  of  the  money,  funds  or  property  of 
such  bank,  or  wilfully  misapplies  its  credit,  is  guilty  of  a 
felony.  Nothing  in  this  section  shall  be  deemed  or  con- 
strued to  repeal,  amend  or  impair  any  existing  provision 
of  law  prescribing  a  punishment  for  any  such  offense. 

Section  56 lb.      Every  director  of  a  bank  in  this  state  ^;„%"y^"J; ",1^^!1^- 

.yyJlQ.  participation 

1 .  In  case  of  the  fraudulent  insolvency  of  such  bank, 
shall  have  participated  in  such  fraud;  or 

2.  Wilfully  does  any  act  as  such  director  which  is 
expressly  forbidden  by  law  or  wilfully  omits  to  perform 
any  duty  imposed  upon  him  as  such  director  by  law,  is 
guilty  of  a  misdemeanor. 

[189] 


therein,    by  director 
— misdemeanor. 


Penal  Code  BLYTH.  WITTER  &   CO. 

The  insolvency  of  a  bank  is  deemed  fraudulent  unless 
its  affairs  appear  upon  investigation  to  have  been  admin- 
istered clearly,  legally  and  with  the  same  care  and  dili- 
gence that  agents  receiving  a  compensation  for  their  ser- 
vices are  bound,  by  law,  to  observe. 

Guaranty  or  en-       Section  5  6  I  c.     An  officer  or  agent  of  any  bank  in  this 

dorsement,  for  bank, 

by  officer  or  agent,  State,   who  makes  or  delivers  any  guaranty  or  endorse- 

misdemeanor.  i      l      ir        r  i      i  i  i  i  •  i 

ment  on  behalr  or  such  bank,  whereby  it  may  become 
liable  upon  any  of  its  discounted  notes,  bills  or  obliga- 
tions, in  a  sum  beyond  the  amount  of  loans  and  dis- 
counts which  such  bank  may  legally  make,  is  gfuilty  of  a 
misdemeanor. 

Director  concurring       Section  56 Id.     A  director  of  a  bank,  organized  under 

in  vote  for  illegal 

bank  loan  or  dis-  the  laws  of  this  State,  who  concurs  in  any  vote  or  act  of 

count;  or     ,  .  r      i  i 

the  directors  or  such  corporation,  or  any  or  them,  by 
which  it  is  intended  to  make  a  loan  or  discount  to  any 
director  of  such  corporation,  or  upon  paper  upon  which 
any  such  director  is  liable  or  responsible  to  an  amount 
exceeding  the  amount  allowed  by  the  statutes;  or 

Director,  officer.       Any  director,  trustee,  officer  or  employee  of  any  such 

employee  making 

or  attempting  illegal  bank  who  makes  or  maintains,   or  attempts  to  make  or 

deposit  of  bank 

funds;  or  maintain,  a  deposit  of  such  bank's  funds  with  any  other 
corporation  on  condition,  or  with  the  understanding,  ex- 
press or  implied,  that  the  corporation  receiving  such  de- 
posit make  a  loan  or  advance,  directly  or  indirectly,  to 
any  director,  trustee,  officer  or  employee  of  the  corpora- 
tion so  making  or  maintaining  or  attempting  to  make  or 
maintain  such  deposit;  or 

confeaUn°gdiTc^ounts       ^^^  officcr  or  employee  of  any  such  bank  who  Inten- 
of  bank  loans,  or  tionally  conceeJs  from  the  directors  or  trustees  of  such 

purchase  or  sale  of 

bank  securities  be-  bcUik  any  discounts  OT  loans  made  by  it  between  the 

tween  meetings,  or 

failing  to  report  regular  meetings  of  its  board  of  directors  or  trustees,  or 

same  when  so  re-  ^  ... 

quired  by  law—  the  puTchasc  of  auy  securities  or  the  sale  of  its  securities 

guilty  of  misde-     ,       .  ,  .      ,  ,  .       i       i.    .i 

meanor.  durmg  the  Same  period,  or  knowmgly  rails  to  report  to 
the  board  of  directors  or  trustees  when  required  to  do  so 

[1901 


APPENDIX  Penal  Code 


by  law,  all  discounts  or  loans  made  by  it  and  all  securi- 
ties purchased  or  sold  by  it  between  the  regular  meet- 
ings of  its  board  of  directors  or  trustees,  is  guilty  of  a 
misdemeanor. 

Nothing  in  this  section  shall  render  any  loan  made  by 
the  directors  of  any  bank,  in  violation  thereof,  invalid. 

Section  563a.     Any  officer,  director,  trustee,  employee  offlrer.  director. 

employee,  etc., 

or  agent  of  any  bank  organized  under  the  laws  or  this  making  false  entry 

"  .or  omitting  to  make 

state,  who  makes  a  false  or  untrue  entry  in  any  book  or  required  entry, 

.  ^    .  riilty  of  felony. 

any  report,  tag  or  statement,  ot  the  busmess,  attairs  or 
condition,  in  whole  or  in  part,  of  such  corporation,  with 
intent  to  deceive  any  officer,  director  or  trustee  thereof, 
or  any  agent  or  examiner,  private  or  official,  employed 
or  lawfully  appointed  to  examine  into  its  condition  or 
into  any  of  its  affairs,  or  any  public  officer,  office  or 
board  to  which  such  bank  is  required  by  law  to  report, 
or  which  has  authority  by  law  to  examine  into  its  affairs, 
or  into  any  of  its  affairs,  or  who,  with  like  intent,  wil- 
fully omits  to  make  a  new  entry  of  any  matter  particu- 
larly pertaining  to  the  business,  property,  afFairs,  assets 
or  accounts  of  such  bank  in  any  book,  report,  statement, 
or  tag  of  such  bank  made,  written  or  kept,  or  required 
to  be  made,  written  or  kept  by  him  or  under  his  direc- 
tion, is  guilty  of  a  felony. 

Section   563b.      Any  person  who  wilfully  and  know-  Making  or  circuiat- 

ing  untrue,  deroga- 

ingly  makes,  circulates  or  transmits  to  another  or  others  tory  statement  a» 

°  ■'  I  1        r   *°  financial  condition 

any  statement  or  rumor,  written,  printed  or  by  word  of  of  bank,  misdemeanor. 
mouth,  which  is  untrue  in  facts  and  is  directly  or  by  in- 
ference derogatory  to  the  financial  condition  or  affects 
the  solvency  or  financial  standing  of  any  bank,  doing 
business  in  this  state,  or  who  knowingly  counsels,  aids, 
procures  or  induces  another  to  start,  transmit  or  circu- 
late any  such  statement  or  rumor,  is  guilty  of  a  misde- 
meanor punishable  by  a  fine  of  not  more  than  one  thou- 
sand dollars  or  by  imprisonment  for  not  more  than  one 
year,  or  both. 

[191] 


BLYTH,  WITTER  &  CO. 


Foreign  General  Laws,  Chapter  772,  Statutes  of  1921: 
Banking 
Corporations.  An  act  defining  corporations  for  the  purpose  of  engaging  in  inter- 
national or  foreign  banking  or  other  international  or  foreign 
financial  operations  or  in  banking  or  other  financial  opera-^ 
tions  in  a  dependency  or  insular  possession  of  the  United 
States,  either  directly  or  through  the  agency,  ownership  or 
control  of  local  institutions  in  foreign  countries,  or  in  such 
dependencies  or  insular  possessions  and  to  act  when  required 
by  the  secretary  of  the  treasury  of  the  United  States  as  fiscal 
agents  of  the  United  States;  providing  for  the  incorporation, 
pow^ers  and  supervision  of  such  corporation,  and  providing 
for  the  licensing  by  the  superintendent  of  banks  of  foreign 
corporations  to  transact  in  this  state  the  business  of  a  corpor- 
ation defined  and  organized  by  this  act. 

The  people  of  the  State  of  Cahfomia  do  enact  as  follows: 

Section    1 .     When  authorized  by  the  previous  written 
consent  of  the  superintendent  of  banks  as  provided  by 
section  one  twenty-seven  of  the  "bank  act"  of  California 
three  or  more  persons  may  organize  a  corporation   for 
the  purpose  of  engaging  in  international  or  foreign  bank- 
ing or  other  international  or  foreign  financial  operations, 
or  in  banking  or  other  financial  operations  in  a  depen- 
dency or  insular  possession  of  the  United  States,   either 
directly  or  through  the  agency,  ownership,  or  control  of 
local  institutions  in  foreign  countries,   or  in  such  depen- 
dencies or  insular  possessions  as   provided  by  this  act, 
May,  when  and  to  act  when  required  by  the  secretary  of  the  treasury 
u.  s^  fecal  agent"  of  the  United  States  as  fiscal  agents  of  the  United  States. 
Such   persons   shall    execute   articles    of   incorporation 
which  shall  specify  in  general  terms  the  objects  for  which 
the  association  is  formed  and  may  contain  any  other  pro- 
Articies  of  visions  not  inconsistent  with  law  which   the  corporation 
^ToXnfs'of!  may  see  fit  to  adopt  for  the  regulation  of  its  business  and 
the  conduct  of  its  affairs. 

Such  articles  of  incorporation  shall  be  signed  by  all  of 
the  persons  intending  to  participate  in  the  organization 
of  the  corporation  and,  thereafter,  shall  be  forwarded  to 
the  superintendent  of  banks  and  shall  be  filed  and  pre- 
served in  his  office.     The  persons  signing  the  said  articles 

[192] 


FOREIGN  BANKING  CORPORATIONS 


of  incorporation  shall,  under  their  hands,  make  an  organ-  organization 
ization  certificate  which  shall  specifically  state:  itatemenu  in. 

First — The  name  assumed  by  such  corporation,  which 
shall  be  subject  to  the  approval  of  the  superintendent  of 
banks. 

Second — ^The  place  or  places  where  its  operations  are 
to  be  carried  on. 

Third — ^The  place  in  the  State  of  California  where  its 
main  office  is  to  be  located. 

Fourth — ^The  amount  of  its  capital  stock  and  the  num- 
ber of  shares  into  which  the  same  shall  be  divided. 

Fifth — The  names  and  places  of  business  or  residence 
of  the  persons  executing  the  certificate  and  the  number  of 
shares  to  which  each  has  subscribed. 

Sixth — The  fact  that  the  certificate  is  made  to  enable 
the  persons  subscribing  the  same,  and  all  other  persons, 
firms,  companies,  and  corporations,  who  or  which  may 
thereafter  subscribe  to  or  purchase  shares  of  the  capital 
stock  of  such  corporation,  to  avail  themselves  of  the  ad- 
vantages of  this  act. 

Each  corporation  so  organized  shall  have  power,  under 
such  rules  and  regulations  as  the  superintendent  of  banks 
may  prescribe: 

(a)  To  purchase,  sell,  discount,  and  negotiate,  with  or  powers  of 
without  its  indorsement  or  guaranty,  notes,  drafts,  checks,  corporations. 
bills  of  exchange,  acceptances,  including  bankers*  accept- 
ances, cable  transfers,  and  other  evidences  of  indebted- 
ness; to  purchase  and  sell,  with  or  without  its  indorse- 
ment or  guaranty,  securities,  including  the  obligations  of 
the  United  States  or  of  any  state  thereof  but  not  including 
shares  of  stock  in  any  corporation  except  as  herein  pro- 
vided; to  accept  bills  or  drafts  drawn  upon  it  subject  to 
such  limitations  and  restrictions  as  the  superintendent  of 

[193] 


BLYTH.  WITTER  &   CO. 


^^^R'^.frS^  banks  may  impose;  to  issue  letters  of  credit;  to  purchase 

FOREIGN   BANKING  j  r 

coRPORATiONS—  gj^j  ggU  coin,   bullion,   and  exchange;   to  borrow  and  to 

Continued. 

lend  money;  to  issue  debentures,  bonds,  and  promissory 
notes  under  such  general  conditions  as  to  security  and 
such  limitations  as  the  superintendent  of  banks  may  pre- 
scribe, but  in  no  event  having  liabilities  outstanding 
thereon  at  any  one  time  exceeding  ten  times  its  capital 
stock  and  surplus;  to  receive  deposits  outside  of  the 
United  States  and  to  receive  only  such  deposits  in  this 
state  or  in  any  other  state  of  the  United  States  as  may  be 
incidental  to  or  for  the  purpose  of  carrying  out  transac- 
tions in  foreign  countries  or  dependencies  or  insular  pos- 
sessions of  the  United  States;  and  generally  to  exercise 
such  powers  as  are  incidental  to  the  powers  conferred  by 
this  act  or  as  may  be  usual,  in  the  determination  of  the 
superintendent  of  banks,  in  connection  with  the  transac- 
tion of  the  business  of  banking  or  other  financial  opera- 
tions in  the  countries,  colonies,  dependencies,  or  posses- 
sions in  which  it  shall  transact  business  and  not  inconsist- 
ent with  the  power  specifically  granted  herein.  Nothing 
contained  in  this  act  shall  be  construed  to  prohibit  the 
superintendent  of  banks,  under  his  power  to  prescribe 
rules  and  regulations,  from  limiting  the  aggregate  amount 
of  liabilities  of  any  or  all  classes  incurred  by  the  corpor- 
ation and  outstanding  at  any  one  time.  Whenever  a  cor- 
poration organized  under  this  section  receives  deposits 
in  the  United  States  authorized  by  this  act  it  shall  carry 
reserves  in  such  amounts  as  the  superintendent  of  banks 
may  prescribe,  but  in  no  event  less  than  1  0  per  centum 
of  its  deposits. 

(b)  To  establish  and  maintain  for  the  transaction  of 
its  business  branches  or  agencies  in  foreign  countries,  their 
dependencies  or  colonies,  and  in  any  state  of  the  United 
States,  and  in  the  dependencies  or  insular  possessions  of 
the  United  States,  at  such  places  as  may  be  approved  by 
the  superintendent  of  banks  and  under  such  rules  and 
regulations  as  he  may  prescribe,   including  any  state  of 

[194] 


FOREIGN  BANKING  CORPORATIONS 


the  United  States,  or  countries  or  dependencies  not  speci-  IorSgn  B^NKrao 
fied  in  the  original  organization  certificate.  con^trnu^d^^^°^^~ 

(c)  With  the  consent  of  the  superintendent  of  banks  to 
purchase  and  hold  stock  or  other  certificates  of  owner- 
ship in  any  other  corporation  organized  under  the  provi- 
sions of  this  act,  or  under  the  laws  of  any  foreign  country 
or  a  colony  or  dependency  thereof,  or  under  the  laws  of 
any  state,  dependency  or  insular  possession  of  the  United 
States  but  not  engaged  in  the  general  business  of  buying 
or  selling  goods,  wares,  merchandise,  or  commodities  in 
the  United  States,  and  not  transacting  any  business  in  the 
United  States  except  such  as  in  the  judgment  of  the  super- 
intendent of  banks  may  be  incidental  to  its  international 
or  foreign  business;  provided,  however,  that,  except  with 
the  approval  of  the  superintendent  of  banks,  no  corpora- 
tion organized  hereunder  shall  invest  in  any  one  corpora- 
tion an  amount  in  excess  of  10  per  centum  of  its  own 
capital  and  surplus,  except  in  a  corporation  engaged  in 
the  business  of  banking,  when  1  5  per  centum  of  its  capi- 
tal and  surplus  may  be  so  invested;  provided,  further, 
that  no  corporation  organized  hereunder  shall  purchase, 
own,  or  hold  stock  or  certificates  of  ownership  in  any 
other  corporation  organized  hereunder  or  under  the  laws 
of  any  state  which  is  in  substantial  competition  therewith, 
or  which  holds  stock  or  certificates  of  ownership  in  cor- 
porations which  are  in  substantial  competition  with  the 
purchasing  corporation. 

Nothing   contained    herein    shall    prevent    corporations  Holding  stock  in 

1    1       1  1  •  1      o'^er  corporation! — 

organized  hereunder  from  purchasing  and  holdmg  stock  when  and  how 

*=>  permitted. 

in  any  corporation  where  such  purchase  shall  be  necessary 
to  prevent  a  loss  upon  a  debt  previously  contracted  m 
good  faith;  and  stock  so  purchased  or  acquired  in  cor- 
porations organized  under  this  act  shall  within  six  months 
from  such  purchase  be  sold  or  disposed  of  at  public  or 
private  sale  unless  the  time  to  so  dispose  of  same  is  ex- 

[195] 


BLYTH.  WITTER  &  CO. 


tended  by  the  superintendent  of  banks  as  provided  by 
section  thirty-seven  of  the  "bank  act"  of  California. 

Carrying  on       No  Corporation  organized  under  this  act  shall  carry  on 

part  of  business  r.i.  'iTi-ic  ..  L 

in  TJ.  s.  any  part  or  its  business  in  the  United  otates  except  such 
as,  in  the  judgment  of  the  superintendent  of  banks,  shall 
be  incidental  to  its  international  or  foreign  business;  and 
provided,  further,  that  except  such  as  is  incidental  and 
preliminary  to  its  organization  no  such  corporation  shall 
exercise  any  of  the  powers  conferred  by  this  act  until  it 
has  been  duly  authorized  by  the  superintendent  of  banks 
to  commence  business  as  a  corporation  organized  under 
the  Civil  Code  of  California  and  the  provisions  of  this 
act. 

Engaging  in       No  Corporation  organized  under  this  act  shall  engage 

Commerce —  ^  ^.   .  .f. 

restrictions  Jn  Commerce  or  trade  in  commodities  except  as  speciri- 

upon.  til  1  1  •  1 

cally  provided  in  this  section,  nor  shall  it  either  directly 
or  indirectly  control  or  fix  or  attempt  to  control  or  fix  the 
price  of  any  such  commodities.  The  license  of  any  cor- 
poration violating  this  provision  shall  be  subject  to  for- 
feiture in  the  manner  hereinafter  provided  in  this  act.  It 
shall  be  unlawful  for  any  director,  officer,  agent,  or  em- 
ployee of  any  such  corporation  to  use  or  to  conspire  to 
use  the  credit,  the  fimds,  or  the  power  of  the  corpora- 
tion to  fix  or  control  the  price  of  any  such  commodities, 
and  any  such  person  violating  this  provision  shall  be  lia- 
ble to  a  fine  of  not  less  than  one  thousand  dollars  and  not 
exceeding  five  thousand  dollars  or  imprisonment  not  less 
than  one  year  and  not  exceeding  five  years,  or  both,  in 
the  discretion  of  the  court. 
Capital  stock  No  corporation  shall  be  organized  under  the  provisions 
of  this  act  with  a  capital  stock  of  less  than  two  million 
dollars,  one-quarter  of  which  must  be  paid  in  before  the 
corporation  may  be  authorized  to  begin  business,  and  the 
remainder  of  the  capital  stock  of  such  corporation  shall 
be  paid  in  installments  of  at  least  ten  per  centum  of  the 
whole  amount  to  which  the  corporation  shall  be  limited 

[1961 


FOREIGN  BANKING  CORPORATIONS 


as  frequently  as  one  installment  at  the  end  of  each  suc- 
ceeding two  months  from  the  time  of  the  commencement 
of  its  business  operations  until  the  whole  of  the  capital 
stock  shall  be  paid  in.      The  right  of  every  corporation  ^'k^"*  t°  increaie 

or  decrease  capital 

organized  under  the  provisions  of  this  act  to  increase  or  Btock— how 
decrease   its  capital   stock,    to   change   the  number  of   its 
directors,  to  amend  its  articles  of  incorporation,  to  change 
its  principal  place  of  business,  or  its  name,  to  extend  its 
corporate  existence,  or  to  effect  any  other  organic  change 
shall  be  governed  by  the  general  corporation  laws  of  this 
state  and  by  the  "bank  act,"  and  the  procedure  to  effect 
any  such  change  shall  be  that  defined  by  the  general  cor- 
poration laws  and  the  "bank  act."    Any  bank  may  invest  t°nh*^8to\k^ 
in  the  stock  of  any  corporation  organized  under  the  pro-  "[ganTe'd  Wunder. 
visions  of  this  act,  but  the  aggregate  amount  of  stock  held 
in  all  corporations  engaged  in  business  of  the  kind  de- 
scribed in  this  act  and  in  section  fifty-eight  of  the  "bank 
act"  of  California  as  amended  shall  not  exceed  ten  per 
centum  of  the  subscribing  bank's  capital  and  surplus. 

A  majority  of  the  shares  of  the  capital  stock  of  any  Majority  stock 

'  •'  '  o'.vn3rsnip  must  be 

such  corporation  shall  at  all  times  be  held  and  owned  by  ^°^u  s.  citizens, 
citizens  of  the  United  States,  by  corporations  the  con- 
trolling interest  in  which  is  owned  by  citizens  of  the 
United  States,  chartered  under  the  laws  of  the  United 
States  or  of  a  state  of  the  United  States,  or  by  firms  or 
companies,  the  controlling  interest  in  which  is  owned  by 
citizens  of  the  United  States, 

Whenever  it  shall  appear  to  the  superintendent  of  ^P°fi,7J,'Vaw  o[ 
banks  that  any  corporation  organized  under  the  provi-  f^*'/p„^^"3P^^„'^f 
sions  of  this  act  has  violated  the  provisions  of  its  articles  ^^'7;;^*^  "l,\"-i,"„*" 


of  incorporation  or  any  law  of  this  state,  or  is  conduct-  etc 
ing  its  business  in  an  unsafe  or  unauthorized  manner,  or 
if  the  capital  of  any  such  corporation  is  impaired,  or  if 
any  such  corporation  shall  refuse  to  submit  its  books, 
papers  and  concerns  to  the  inspection  of  any  examiner 
of  the  state  banking  department  of  California  or  if  any 
officer   thereof  shall    refuse    to   be   examined    upon    oath 

[197] 


BLYTH.  WITTER  &   CO. 


touching  the  concerns  of  any  such  corporation  or  if  any 
such  corporation  shall  suspend  payment  of  its  obligations, 
or  if  from  any  examination  or  report  provided  for  by  this 
act  the  superintendent  of  banks  shall  have  reason  to  con- 
clude that  such  corporation  is  in  an  unsound  or  unsafe 
condition  to  transact  the  business  for  which  it  is  organ- 
ized, or  that  it  is  unsafe  and  inexpedient  for  it  to  continue 
business,  or  if  any  such  corporation  shall  neglect  or  refuse 
to  observe  any  order  of  the  superintendent  of  banks  spe- 
cified in  sections  one  hundred  thirty-three  or  one  hundred 
thirty-four  of  the  "bank  act"  of  California,  the  superin- 
tendent of  banks  may  forthwith  take  possession  of  the 
property  and  business  of  such  corporation  and  retain  such 
possession  until  such  corporation  shall  resume  business, 
or  its  affairs  be  finally  liquidated  as  provided  by  law  for 
the  liquidation  of  banks. 

Deposit  of  corporate       No  Corporation  organized  under  the  provisions  of  this 

funds  with  other  _  r   •        r  l  •  1  L  J 

corporations,  act  shall  deposit  any  or  its  funds  w^ith  any  other  moneyed 
corporation  unless  such  other  corporation  has  been  nomi- 
nated and  designated  as  such  depositary  as  provided  by 
section  forty-three  of  the  "bank  act"  of  California;  pro- 
vided, however,  that  this  limitation  shall  not  apply  to  the 
deposit  of  funds  by  such  corporation  with  another  mon- 
eyed corporation,  which  owns  all  or  a  majority  of  the 
capital  stock  of  such  corporation. 

ForeigTi  banking        JSJq  corporation  provided  hereunder  shall  be  the  holder 

corporation  holding  "^ 

its  own  shares—  ^f  ^^y  shares  of  its  own  capital  stock  unless  such  stock 

restrictions  upon.  -'  "^ 

shall  have  been  taken  to  prevent  loss  upon  a  debt  pre- 
viously contracted  in  good  faith,  and  stock  so  acquired 
shall,  within  six  months  from  the  time  of  its  acquisition, 
be  sold  or  disposed  of  at  public  or  private  sale;  nor  shall 
it,  either  directly  or  indirectly,  make  any  discount  to  any 
person  for  the  purpose  of  enabling  him  to  pay  for  or  hold 
shares  of  its  stock  either  subscribed  for  or  purchased  by 
Penalty,  him.     Any  corporation  organized  under  the  provisions  of 

[198] 


FOREIGN  BANKING  CORPORATIONS 


this   act   making   any   such   discount   shall    forfeit    to    the 
people  of  the  state  twice  the  amount  of  such  discount. 

No  corporation  organized  under  the  provisions  of  this  Corporate  book*  and 

records — methodi  of 

act  shall  by  any  system  of  accounting  or  any  device  of  keeping. 
bookkeeping,  directly  or  indirectly  enter  any  of  its  assets 
upon  its  books  in  the  name  of  any  other  individual,  part- 
nership, unincorporated  association  or  corporation,  or  un- 
der any  title  or  designation  that  is  not  truly  descriptive 
thereof. 

Every  corporation  organized  hereunder  shall  conform 
its  methods  of  keeping  its  books  and  records  to  such  or- 
ders in  respect  thereto  as  shall  have  been  made  and  pro- 
mulgated by  the  superintendent  of  banks.  Any  corpora- 
tion organized  hereunder  that  refuses  or  neglects  to  obey 
such  order  shall  be  subject  to  a  penalty  of  one  hundred 
dollars  for  each  day  it  so  refuses  or  neglects. 

Each  official   communication   directed  by  the  superin-  Official  communica- 

.  ,         tions  to  Superintend- 

tendent  of  banks  to  a  corporation  organized  under  the  ent  of  Banks- 
provisions  of  this  act  or  to  any  officer  thereof,  relating  to 
an  examination  or  investigation  conducted  by  the  state 
banking  department  or  containing  suggestions  or  recom- 
mendations as  to  the  conduct  of  the  business  of  such  cor- 
poration, shall  be  submitted,  by  the  officer  receiving  it, 
to  the  board  of  directors  at  the  next  meeting  of  such 
board,  and  duly  noted  in  the  minutes  of  the  meetings  of 
such  board. 

On  or  before  the  first  day  of  February  in  each  year,   Annual  report  by 

...       corporation  to 

each  corporation  organized  under  the  provisions  of  this  superintendent. 
act  and  every  foreign  corporation  licensed  by  the  super- 
intendent of  banks  to  transact  the  business  of  such  a  cor- 
poration in  this  state,  shall  make  a  written  report  to  the 
superintendent  of  banks  which  shall  contain  a  statement 
of  its  condition  on  the  morning  of  the  first  day  of  Jan- 
uary in  said  year  and  shall  be  in  the  form  and  contain  the 
matters  prescribed  by  the  superintendent  of  banks.  The 
superintendent  of  banks  may,  however,  in  his  discretion, 

[199] 


BLYTH.  WITTER  &   CO. 


Special  reports. 


ANNUAL  REPORT  accept  from  a   corporation   organized  hereunder,   which 

BY  CORPORATION  ,  ,  ,  .  f        . 

TO  SUPERINTEND-  has  branches  in  a  foreign  country  or  countries,  a  report 

ENT— Continued.  .     .  -^  •  f 

containing  a  statement  of  its  condition  as  of  a  date  not 
later  than  the  first  day  of  January  and  not  earlier  than 
the  first  day  of  November  in  the  preceding  year.  Every 
such  report  shall  be  verified  by  the  oaths  of  the  two  prin- 
cipal officers  in  charge  of  the  affairs  of  such  corporation 
organized  under  the  provisions  of  this  act  or  foreign  cor- 
poration at  the  time  of  such  verification,  which  shall  state 
that  the  report  is  true  and  correct  in  all  respects  to  the 
best  of  the  knowledge  and  belief  of  the  persons  verifying 
it,  and  that  the  usual  business  of  such  corporation  or  for- 
eign corporation  has  been  transacted  at  the  location  re- 
quired by  this  act  and  not  elsewhere. 

Every  such  corporation  organized  hereunder  and  for- 
eign corporation  shall  also  make  such  other  special  re- 
ports to  the  superintendent  of  banks  as  he  may  from  time 
to  time  require,  which  shall  be  in  such  form  and  filed  at 
such  date  as  may  be  prescribed  by  the  superintendent  of 
banks  and  shall,  if  required  by  him,  be  verified  in  such 
manner  as  he  may  prescribe. 

^^^akU'^rt^^oft—  ^^  ^^^  such  Corporation  organized  hereunder  or  foreign 
penalty  for.  corporation  shall  fail  to  make  any  report  required  by  this 
act  on  or  before  the  day  designated  for  the  making 
thereof,  or  shall  fail  to  include  therein  any  matter  required 
by  the  superintendent  of  banks,  it  shall  forfeit  to  the 
people  of  the  state  the  sum  of  one  hundred  dollars  for 
every  day  that  such  report  shall  be  delayed  or  withheld, 
and  for  every  day  that  it  shall  fail  to  report  any  such 
omitted  matter,  unless  the  time  therefor  shall  have  been 
extended  by  the  superintendent  of  banks. 

Annual  stockholders'  Evcry  Corporation  organized  under  the  provisions  of 
this  act  shall  hold  a  meeting  of  its  stockholders  annually 
upon  a  date  fixed  in  its  by-laws,  such  meeting  to  be  held 

List  of  stockholders  at  its  main  office  in  this  state.      Every  such  corporation 

to  be  kept,     iiii  .  •  rr        i         i  -i 

shall  keep  at  its  main  office  books  containing  the  names  of 
all  stockholders  thereof,  and  the  names  and  addresses  of 

[200] 


FOREIGN  BANKING  CORPORATIONS 


the  members  of  its  board  of  directors,  together  with 
copies  of  all  reports  made  by  it  to  the  superintendent  of 
banks.     Every  such  corporation  shall  make  reports  to  the  Heports  required  by 

Superintendent. 

superintendent  of  banks  at  such  times  and  in  such  form  as 
he  may  require;  and  shall  be  subject  to  examination  once 
a  year  and  at  such  other  times  as  may  be  deemed  neces- 
sary by  the  superintendent  of  banks   by   examiners   ap-  Examinations  by 

,  Superintendent. 

pointed  by  him,  the  cost  of  such  examinations  to  be  fixed 
by  the  superintendent  of  banks  and  to  be  paid  by  the  cor- 
poration examined. 

The  directors  of  any  corporation  organized  under  the  Dividend  declara- 
tions— when  and  how 

provisions  of  this  act  may,  semiannually,  declare  a  divi-  made. 
dend  of  so  much  of  the  net  profits  of  the  corporation  as 
they  shall  judge  expedient;  but  each  corporation  shall, 
before  the  declaration  of  a  dividend,  carry  one-tenth  of 
its  net  profits  of  the  preceding  half  year  to  its  surplus  fund 
until  the  same  shall  amount  to  twenty  per  centum  of  its 
capital  stock. 

No  officer,    director,  clerk  or  other  employee  of  any  Discount  or  loan 

by  oififer,  director 

corporation  organized  under  the  provisions  of  this  act,  or  employee— restric- 

1    .  I  tions  upon. 

and  no  person  in  any  way  interested  or  concerned  m  the 
management  of  its  affairs,  shall  as  individuals  discount, 
or  directly  or  indirectly,  make  any  loan  upon  any  note  or 
other  evidence  of  debt,  which  he  shall  know  to  have  been 
offered  for  discount  to  such  corporation,  and  to  have 
been  refused.  Every  person  violating  the  provisions  of  Penalty. 
this  subdivision,  shall,  for  each  offense,  forfeit  to  the 
people  of  the  state  twice  the  amount  of  the  loan  which  he 
shall  have  made. 

No   officer,   director,   clerk  or  other  employee  of  any  ^""^"^  ^-^  -'"^"^  ^" 


poration  to  ofScer. 
>r  or  employ 
tions  upon. 


corporation  organized  under  the  provisions  of  this  act  ^^^l^'  employee 
shall  borrow,  directly  or  indirectly,  from  such  corporation 
any  sum  of  money  without  the  written  approval  of  a  ma- 
jority of  the  board  of  directors  thereof  filed  in  the  office 
of  such  corporation  or  embodied  in  a  resolution  adopted 
by  a  majority  vote  of  such  board  exclusive  of  the  director 

[201] 


BLYTH,  WITTER  &   CO. 


Loan  to  a  corporation  to  whom  the  loan  is  made.     If  an  officer,  director,  clerk  or 

in  which  such  officer,         ,  ,  -  .  -ill 

director  or  employee  other  employee  OF  any  such  corporation  shall  own  or  con- 
trol a  majority  of  the  stock  of  any  other  corporation  a 
loan  to  that  corporation  shall  be  considered  as  a  loan  to 
such  officer,  director,  clerk  or  other  employee.  Every 
person  violating  this  provision  shall,  for  each  offense,  for- 
feit to  the  people  of  the  state  twice  the  amount  which  he 
shall  have  borrowed. 

Embez7iement  or       Every  officer,  director,  clerk,  employee,  or  agent  of  any 

corporat?  assets  "and  Corporation  organized  under  this  act  who  embezzles,  ab- 

officerl "ir°ectorrand  stracts,  or  wilfully  misapplies  any  of  the  moneys,  funds, 

6I*iplOV66S     rCCSiVSrS  i  *  •     *  •!  l*"!!!  C 

and  others— how  Credits,  securitics,  evidence  or  indebtedness  or  assets  or 
punishable.  ^^^  character  of  such  corporation;  or  who,  without  au- 
thority from  the  directors,  issues  or  puts  forth  any  certi- 
ficate of  deposit,  draws  any  order  or  bill  of  exchange, 
makes  any  acceptance,  assigns  any  note,  bond,  debenture, 
draft,  bill  of  exchange,  mortgage,  judgment,  or  decree; 
or  who  makes  any  false  entry  in  any  book,  report,  or 
statement  of  such  corporation  with  intent,  in  either  case, 
to  injure  or  defraud  such  corporation  or  any  other  com- 
pany, body  politic  or  corporate,  or  any  individual  person, 
or  to  deceive  any  officer  of  such  corporation,  the  superin- 
tendent of  banks,  or  any  agent  or  examiner  appointed  to 
examine  the  affairs  of  any  such  corporation;  and  every 
receiver  of  any  such  corporation  and  every  clerk  or  em- 
ployee of  such  receiver  who  shall  embezzle,  abstract,  or 
wilfully  misapply  or  wrongfully  convert  to  his  own  use 
any  moneys,  funds,  credits,  or  assets  of  any  character 
which  may  come  into  his  possession  or  under  his  control 
in  the  execution  of  his  trust  or  the  performance  of  the 
duties  of  his  employment;  and  every  such  receiver  or 
clerk  or  employee  of  such  receiver  who  shall,  with  intent 
to  injure  or  defraud  any  person,  body  politic  or  corpo- 
rate, or  to  deceive  or  mislead  the  superintendent  of  banks 
or  any  agent  or  examiner  appointed  to  examine  the  af- 
fairs of  such  receiver,  shall  make  any  false  entry  in  any 
book,  report,  or  record  of  any  matter  connected  with  the 

[202] 


FOREIGN  BANKING  CORPORATIONS 


duties  of  such  receiver;  and  every  person  who  with  hke 
intent  aids  or  abets  any  officer,  director,  clerk,  employee, 
or  agent  of  any  corporation  organized  under  this  act,  or 
receiver  or  clerk  or  employee  of  such  receiver  as  afore- 
said in  any  violation  of  this  act,  shall  upon  conviction 
thereof  be  imprisoned  for  not  less  than  two  years  nor 
more  than  ten  years,  and  may  also  be  fined  not  more  than 
five  thousand  dollars,  in  the  discretion  of  the  court. 

Whoever  being   connected   in   any  capacity  with   any  Representation  ai  to 

....  .  state  liability  for 

corporation  organized  under  this  section  represents  m  any  payment  of  bonds, 

1  1         o  r   r^    ^•r  ••i-iir  I  ^'^"^  ■ — ^°'*'  punish- 

way  that  the  btate  of  Calirornia  is  liable  tor  the  payment  able. 
of  any  bond  or  other  obligation,  or  the  interest  thereon, 
issued  or  incurred  by  any  corporation  organized  here- 
under, or  that  the  State  of  California  incurs  any  liability 
in  respect  of  any  act  or  omission  of  the  corporation,  shall 
be  punished  by  a  fine  of  not  more  than  ten  thousand  dol- 
lars and  by  imprisonment  for  not  more  than  five  years. 

No  person  shall  act  in  this  state  as  the  representative  Acting  as  corporata 

.  .  •  1_       1_        •  J         representative  in 

of  any  foreign  corporation  in  transacting  the  business  de-  state— prerequisites. 
scribed  in  this  act  as  the  business  of  a  corporation  organ- 
ized hereunder  unless  such  corporation  shall  have  com- 
plied with  the  provisions  of  this  act  relating  to  such  cor- 
porations. 

Every  foreign  corporation  before  being  licensed  by  the  f^.f^^^^^^.l^Jtr- 
superintendent  of  banks  to  transact  in  this  state  the  busi-  poraticns  hereunder. 
ness  of  a  corporation  defined  and  organized  hereunder, 
or  any  part  thereof,  shall  subscribe  and  acknowledge  and 
submit  to  the  superintendent  of  banks  at  his  office,  an 
application  certificate  in  duplicate,  which  shall  specifically 
state: 

1 .  The  name  of  such  foreign  corporation. 

2.  The  place  where  its  business  is  to  be  transacted  in  statements  to  be 

^.      »  »»v-    j^»  contained  therein. 

this  state. 

3.  The  amount  of  its  capital  stock  actually  paid  in  cash 
and  the  amount  subscribed  for  and  unpaid. 

[203] 


BLYTH,  WITTER  &  CO. 


4.    A  complete  and  detailed  statement  of  its  financial 
condition  as  of  a  date  within  sixty  days  prior  to  the  date 
of  such  application  certificate. 
Copy  of  charter  and       ^j   fj^g   time  such   application   certificate  is   first  sub- 

by-laws  required, 

mitted  to  the  superintendent  of  banks,  such  corporation 
shall  also  submit  a  duly  authenticated  copy  of  its  charter. 

Prerequisites  to  qj.  articles  of  incorporation  and  its  by-laws. 

transaction  of  busi-  ^  •' 

°^  corporation* here^  No  forcign  Corporation  shall  transact  in  this  state  the 
business  defined  in  this  act  or  any  part  thereof,  unless 
such  corporation  shall  have 

1 .  Been  authorized  by  its  charter  to  carry  on  such  busi- 
ness and  shall  have  complied  with  the  laws  of  the  state 
or  country  under  which  it  is  incorporated ; 

2.  Made  the  deposit  with  the  state  treasurer  of  the 
State  of  California  hereinafter  in  this  section  required; 

3.  Designated  the  superintendent  of  banks,  by  an  in- 
strument in  writing  duly  executed,  its  true  and  lawful  at- 
torney upon  whom  all  process  in  any  action  or  proceed- 
ing by  any  resident  of  the  state  against  it  may  be  served 
with  the  same  effect  as  if  it  were  a  domestic  corporation 
and  had  been  lawfully  served  with  process  within  the 
State ; 

4.  Received  a  license  duly  issued  to  it  by  the  superin- 
tendent of  banks. 

When  the  superintendent  of  banks  shall  have  issued  a 
license  to  any  such  foreign  corporation,  it  may  engage  in 
the  business  of  a  corporation  of  the  kind  authorized  by 
this  act  at  the  location  specified  in  such  license. 

Deposit  with  State       Evcry    such    foreign    corporation,    before    receiving    a 

Treasurer  before  _  ...  1111  ••!_ 

issuing  license  to  license  to  transact  business  in  this  state,  shall  deposit  vtrith 
business,  the  State  treasurer  of  the  State  of  California  upon  authori- 
zation of  the  superintendent  of  banks  in  trust  as  security 
for  the  depositors  with  and  creditors  of  such  corporation 
in  this  state,  lawful  money  of  the  United  States  or  securi- 
ties of  the  kind  and  character  described  in  section  ninety- 

12041 


FOREIGN  BANKING  CORPORATIONS 


six  of  the  "bank  act"  of  California,  of  the  value  of  one 

hundred  thousand  dollars.     Such  foreign  corporation  so 

long  as  it  shall  continue  solvent  and  comply  with  the  laws 

of  this  state,  may  be  permitted  by  the  superintendent  of 

banks  to  collect  the  interest  on  the  securities  so  deposited 

and   from   time  to   time   to   exchange   such   securities   for 

others,   as   provided   by   section   ninety-six   of   the    "bank 

act"  of  California,  and  may  examine  and  compare  such 

securities,  as  provided  by  section  ninety-six  of  the  "bank 

act"   of  California.      Such   foreign  corporation  shall   pay  License  fee  of 

for  such  license  a  fee  of  two  hundred  fifty  dollars. 

Every  foreign  corporation,  duly  licensed  by  the  super-  corporation  liceued 

,  I  rii  -I*  LI*  ^°  transact  business 

mtendent  or  banks  to  transact  m  this  state  the  business  in  state  to  cie  writ- 

I  .        I  1     r  1  1  .1  •        J  ,.   ,.1  £      ten  designation  of 

hereinabove  dehned  and  authorized,  or  any  part  thereor,  agent,  etc. 
shall  within  thirty  days  after  the  date  of  such  license,  sub- 
mit to  the  superintendent  of  banks  a  statement  verified 
by  two  of  its  principal  officers,  which  shall  contain  the  full 
name  and  business  address  of  every  individual,  partner- 
ship or  unincorporated  association,  who  is  acting  or  whom 
it  proposes  to  have  act  as  its  agent  or  representative  in 
this  state.  Whenever  any  such  corporation  shall  engage 
any  person  to  act  for  it  in  this  state  and  the  name  and 
address  of  such  person  is  not  contained  in  such  verified 
statement  submitted  to  the  superintendent  of  banks,  such 
foreign  corporation  shall  forthwith  submit  to  the  superin- 
tendent of  banks  an  amended  statement  verified  in  the 
same  manner  as  the  original.     A  violation  of  this  provi-  Penalty  for 

violation. 

sion  shall  subject  such  foreign  corporation  to  a  forfeiture 
of  one  thousand  dollars  for  each  offense. 

Whenever  the  superintendent  of  banks  shall  have  re-  Revocation  of 

license — effect  of. 

voked  this  license  of  any  such  foreign  corporation  and 
shall  have  taken  the  action  to  make  such  revocation  ef- 
fective, all  the  rights  and  privileges  of  such  foreign  cor- 
poration to  transact  business  in  this  state  shall  forthwith 
cease  and  determine. 

[205] 


leneralLaws  BLYTH,    WITTER   &    CO. 


Chapter  496,  Statutes  1917. 

General  Laws,  Chapter  496,  Statutes    1917,  relating  to  the  liquida- 
tion of  banks, — referred  to  in  note  to  Sec.    136  of  Bank  Act. 

Liquidation  of  An  act  relating  to  the  liquidation  of  banks  by  the  superintendent 
*■  of   banks;    empowering    him    to    levy   assessments    against   the 

members  and  stockholders  of  any  bank  in  process  of  liqui- 
dation by  him  to  an  amount  which  he  may  determine  to  be 
necessary  to  promptly  pay  the  creditors  of  such  bank  in  full; 
to  enforce  such  assessments  by  suit  and  empowering  the 
superior  court  to  determine  the  equities  of  the  members  and 
stockholders  of  any  such  bank  to  any  surplus  w^hich  may 
remain  after  the  payment  of  the  creditors  of  such  bank  in 
full   and  to   award   and   distribute   the   same  accordingly. 

(Approved  May   17,1917.      In  effect  July  27,    1917.) 
The  people  of  the  State  of  California  do  enact  as  follows: 

Supt,  taking  posses-       Section    I.      Whenever    the    superintendent    of   banks 

sion  of  bank  bust-     ini  r  i  •  fill-  l 

ness  in  liquidation,  shali  hereaiter  take  possession  or  the  business  and  prop- 
to  determine  as  to  c  i  i       i     •  i         •  •       ^i   •        ,     ..       c         tl_ 

assessment  of  stock-  erty  of  any  bank  doing  business  m  this  state  ror  the  pur- 
ers,  e  °'^j°.^^y  pose  of  liquidating  its  affairs,  as  provided  by  law,  he 
may  at  any  time  during  the  process  of  such  liquidation 
determine  whether  it  shall  be  necessary  to  assess  the 
members  or  stockholders  of  such  bank  in  order  to 
promptly  pay  the  claims  of  the  creditors  of  such  bank  in 
full  and  he  shall  make  such  assessments  as  he  may  deter- 
mine to  be  necessary  for  that  purpose. 

Determination  to       Section  2.     Such  determination  shall  be  evidenced  by 

make  assessment 

evidenced  by  filing  a  complaint  or  petition  against  all  of  the  members  and 

court    petition. 

stockholders  of  such  bank  filed  by  the  superintendent  of 
banks  in  the  superior  court  of  the  county  where  the  prin- 
cipal place  of  business  of  such  bank  is  or  was  located  at 
the  time  of  the  taking  of  such  possession. 

First  assessment       Section  3.     If  such  assessment,  first  made,  shall  prove 
Supt' mly"makl'^fur-  inadequate  to  pay  all  of  the  creditors  of  such  bank  in  full 

ther  assessments.     .  .  ■,  rii  ir.i 

the   superintendent   or   banks   may  make   further  assess- 

[206] 


APPENDIX  General  La 


maintain  action  to 
enforce  assess- 
ment in  other  state 
or  country. 


ment  or  assessments  by  filing  supplemental  complaints 
or  petitions  in  the  same  proceeding. 

Section   4.      In   any  such   proceeding   such   assessment  Collection  and 

.    application  of  pro- 

shall  be  enforced  and  collected  and  the  proceeds  thereof  ceeds  of  assess- 

1  1  •     J   l_       ments. 

shall  be  added  to  the  funds  of  such  bank  and  applied  by 
the  superintendent  of  banks  for  the  payment  of  just 
claims  against  the  same. 

Section    5.      If   after   the   payment   of   all   just   claims  Disposition  of  sur- 

.....  plus  after  payment 

against  such  bank  and   the  cost  of  liquidation  any  sur-  of  claims,  etc. 
plus  shall  remain  said  court  shall  determine  the  equities 
of  the  respective  members  and  stockholders  of  such  bank 
thereto  and   direct  the  payment  thereof  by  the  superin- 
tendent of  banks  accordingly. 

Section  6.  The  superintendent  of  banks  shall  have  g^pt.  has  power  to 
power  to  maintain  an  action  in  any  other  state  or  coun- 
try to  enforce  and  collect  such  assessments  against  any 
of  such  members  or  stockholders  and  the  proceeds 
thereof  shall  become  a  part  of  the  fund  and  be  subject 
to  the  same  disposition  as  if  collected  in  the  proceedings 
provided  for  in  this  act. 

Section  7.     This  act  shall  not  affect  any  action  or  pro-  Act  not  to  affect 

,.  ..  11  I  -.itrLl  •  proceeding- instituted 

ceeding  instituted  by  the  superintendent  ot  banks  prior  p^ior  to  enactment. 
to  its  enactment. 

Section  8.  If  any  section,  subsection,  sentence,  clause 
or  phrase  of  this  act  is  for  any  reason  held  to  be  un- 
constitutional, such  decision  shall  not  affect  the  validity 
of  the  remaining  portion  of  this  act.  The  legislature 
hereby  declares  that  it  would  have  passed  this  act,  and 
each  section,  subsection,  sentence,  clause  or  phrase 
thereof,  irrespective  of  the  fact  that  any  one  or  more 
other  sections,  subsections,  sentences,  clauses  or  phrases 
be  declared  unconstitutional  or  its  operation  or  applica- 
tion is  or  may  be  limited  or  controlled  by  any  constitu- 
tional provision. 

[207; 


Public  Deposits  BLYTH,  WITTER  &  CO. 

General    Laws,    Statutes    of     1907,    as    amended    by 
Statutes  of  1921: 

Deposits  o^puWic  ..^j^  ^^^  ^Q  provide  for  and  regulate  the  deposit  of  county 
and  municipal  moneys  in  banks  and  banking  corpora- 
tions, limiting  the  amount  of  public  moneys  that  may 
be  deposited  therein,  and  providing  a  penalty  for  the 
illegal  deposit  and  use  thereof,"  approved  March  23, 
1907,  Statutes  of  1907,  Chapter  522  as  amended  by 
act  approved  June  3,  1921,  Statutes  of  1921,  Chap- 
ter 785. 

—may  be  made  by       Section    1 .      All  moneys  belonging  to   any  county  or 

legal  custodian,  in 

state  or  national  municipality  Within  the  state,   may  be  deposited  by  any 

banks  in  State.  r  ^     -  •    •        f  \  •  ill 

officer  of  such  county  or  municipality  having  the  legal 
custody  of  such  county  or  municipal  funds  in  any  state 
or  national  bank  or  banks  in  this  state;  provided,  that 
such  bank  or  banks  in  which  such  moneys  are  deposited 
shall  furnish  as  security  for  such  deposits,  bonds  of  the 
United  States,  or  of  this  state,  or  of  any  county,  city  and 
county,  city  or  school  district  within  this  state,  or  of  any 
irrigation,  or  county  water  works  district  organized  under 
the  laws  of  this  state  and  which  bonds  are  legal  for  invest- 
ments by  savings  banks  in  this  state,  approved  by  the 
officer  making  the  deposit  and  the  district  attorney  for 
Security  therefor  to  the  county  or  the  attorney  for  the  municipality  to  which 

be  furnished  by 

depositary  banks,  tj^g  deposit  bclongs.  The  market  value  of  the  bonds  fur- 
nished as  security,  shall  be  at  least  ten  per  cent  in  excess 
of  the  amount  of  the  deposit  secured  thereby;  but  the 
amount  of  the  deposit  shall  in  no  case  exceed  the  face 
value  of  the  bonds  furnished  as  security  therefor;  and 
provided,  that  such  bank  or  banks  shall  pay  a  reasonable 
Interest  payable  on  j-gte  of  interest,  not  Icss  than  two  per  cent  per  annum  on 

daily  balances. 

the  daily  balance  therein  deposited;  provided,  further, 
that  the  treasurer  of  any  such  county  or  municipality  may, 
by  and  with  the  consent  of  the  board  of  supervisors  or 
board  of  trustees  or  other  governing  body  of  any  such 

[2081 


APPENDIX  Public  Deposits 

county  or  municipality  and  under  such  conditions  as  they  ^mad^e^outl^idroT 
may  fix,  deposit  moneys  in  any  bank  or  banks  outside  of  ^***^- 
this  state,  necessary  for  the  payment  of  the  principal  or 
interest  of  bonds  at  the  place  or  places  at  which  the  same 
are  payable.     (As  amended,   1921.) 

Section  2.     The  rate  of  interest  shall  be  fixed  annually  ferest^|,„'*d\Vosits- 
as  herein  provided  in  the  month  of  January  of  each  year  t°i,'^;„'^fi^''"d^"'*  ^^ 
on  all  deposits  to  be  made  for  such  year;  provided,  that 
the  rate  of  interest  for  the  year  ending  December  31st, 
1907,  may  be  fixed  as  herein  provided  within  ninety  days 
after  this  act  goes  into  effect.      The  rate  of  interest  shall 
be  fixed  in  the  case  of  counties,  by  the  treasurer,  auditor, 
and  chairman  of  the  board  of  supervisors,  and  in  the  case 
of  municipalities  by  the   treasurer,   auditor    (or  clerk  in 
municipalities  having  no  auditor)    and  chairman  of  the 
council   or   other   governing  body   of  such  municipality. 
Said  rate  of  interest  shall  be  a  reasonable  rate  and  not  less  fg^^go^.^a^^^^jg''^^^ 
than  two  per  cent  per  annum  on  the  daily  balances  de-  "nifo^n. 
posited;  and  the  rate  of  interest  so  established  for  each 
year  as  herein  provided,  shall  be  the  uniform  rate  of  in- 
terest required  from  all  banks  receiving  deposits  from  the 
county  or  municipality,  for  that  year. 

Interest  on  all  moneys  deposited  as  herein  provided  Payment  of  interest 

1  •    •        !•  J    on  deposits — how 

for  shall  belong  to  the  county  or  municipality  represented  and  when  made. 
by  the  officer  making  such  deposit  and  shall  be  paid  quar- 
terly into  the  general  fund  of  such  county  or  municipality 
except  where  the  law  otherwise  directs. 

Section  3.      It  shall  be  the  duty  of  the  officer  making  officer  making  de- 

.  f  111*  1-111  •      posits  to  receive  and 

the  deposit,  to  receive  from  the  bank  in  which  the  deposit  flie  receipts. 
is  made,  a  receipt  or  receipts  in  duplicate  showing  the 
date  and  amount  of  deposit  and  rate  of  interest  to  be  paid 
thereon,  one  copy  of  which  said  officer  shall  keep  on  file 
in  his  office  and  he  shall  file  one  copy  with  the  auditor  of 
the  county  or  auditor  of  the  municipality  (or  clerk  in 
municipalities  having  no  auditor)  as  the  case  may  be. 

[209] 


Public  Deposits BLYTH,  WITTER  &  CO. 

Public  record  re-       Scction  4.      Evcrv  treasurer  shall  keep  a  record  in  his 

quired  of  such  ae-  ""  *^ 

posits  and  of  banks  office  which  shall  be  oocn  to  public  inspection,  showing 

applying  therefor.  r  r-  r-  >  o 

at  all  times  the  amount  of  money  on  deposit  and  all  banks 
in  which  the  same  is  deposited,  and  dates  of  deposit.  Also 
a  record  of  all  banks  making  application  for  the  deposit 
of  the  public  funds. 

Total  amount  of       Scction  5.     The  total  amount  of  public  moneys  on  de- 

public  deposits —  ^  -^ 

limitations  upon,  posit  in  any  bank,  inclusive  of  all  moneys  belonging  to 
the  state  or  to  any  county  or  municipality  within  this  state, 
shall  not  at  any  one  time  exceed  the  paid  up  capital  stock 
and  surplus  of  such  depositary  bank  or  banks.  No  officer 
shall  have  on  deposit  at  any  one  time  more  than  ten  per 
cent  of  the  public  moneys  under  his  control  and  avail- 
able for  deposit  in  any  bank  while  there  are  other  quali- 
^couniy  o?Sc^  fi^d  banks  requesting  such  deposits;  provided,  that  no 
pahty.  treasurer  of  a  county  or  municipality,  shall  be  required  to 
deposit  public  moneys  in  any  bank  outside  of  the  county 
or  miunicipality  owning  the  money.   (As  amended  1921.) 

Bank  receipts  for  de-       Section  6.     The  receipt  issued  by  any  bank  for  depos- 

posits  to  be  counted  ^  •'  •" 

as  cash,  jj-s  made  therein,  together  with  the  bonds  held  as  security 
therefor,  shall  be  held  by  the  treasurer  making  the  deposit 
and  be  recognized  and  counted  as  cash  to  the  amount  re- 
cited in  the  receipt  by  the  officers  required  by  law  to 
count  the  same. 
Deposits,  with  in-       Section    7.      Deposits,    with  interest   thereon,    shall  be 

terest,  subject  to 

withdrawal,  subject  to  withdrawal  on  demand  of  the  treasurer  making 
the  same,  or  his  successors  in  office,  and  any  bank  receiv- 
ing the  deposit  of  public  moneys,  may  at  any  time  return 
the  same  to  the  public  officer  making  such  deposit,  to- 
gether with  interest  to  date  of  return,  and  it  shall  be  the 
duty  of  the  public  officer  upon  receiving  the  return  of 
such  deposit,  to  immediately  return  to  such  bank  all 
bonds  held  as  security  for  the  deposit  returned.  When 
any  officer  withdraws  his  deposit  he  shall  return,  on  de- 
mand of  the  bank,  such  bonds  as  were  held  as  security  for 
the  deposit  or  portion  thereof  withdrawn. 

12101 


APPENDIX  Public  Deposits 


Section   8.      Should  any  bank  fail   to  pay  any  public  Bank  failing  to  pay 

deposits  on  demand, 

moneys  held  on  deposit  as  herein  provided,   the  officer  bonds  held  as  security 

■^  ...         ™*y  "*  sold. 

making  such  deposit  may,  after  ten  days'  written  notice 
to  such  bank,  proceed  to  sell  at  public  or  private  sale, 
such  of  the  bonds  held  by  him  as  security  as  he  may  see 
fit;  provided,  however,  that  he  shall  sell  no  bonds  for  less 
than  their  face  value  except  at  public  sale  after  ten  days' 
printed  notice  in  some  newspaper  of  general  circulation 
published  in  the  county  where  the  sale  is  to  take  place. 
The  proceeds  of  such  sale,  after  paying  all  expenses,  shall 
be  credited  to  the  account  of  the  bank  which  deposited 
the  bonds  as  collateral.  Any  bank  failing  to  make  pay- 
ment, may,  at  any  time  before  the  sale  of  the  bonds  is 
completed,  stop  such  sale  by  repaying  all  the  moneys  de- 
posited with  it,  together  with  any  expense  that  may  have 
been  incurred  by  the  officer  making  such  deposit,  as  the 
result  of  such  failure.  Should  the  proceeds  of  any  such 
sale  fail  to  fully  repay  any  deposit,  the  balance  remaining 
unpaid  may  be  collected  in  an  action  of  law  in  the  name 
of  the  officer  making  the  deposit. 

Section  9.     Public  officials  shall  not  be  responsible  for  Responsibility  of 

.  ,  .      public  officials  for 

any   loss   of   public   moneys   resulting   from   the   deposit  loss  of  deposits,  etc. 

thereof  when  made  in  accordance  with  the  provisions  of 

this  act.      It  shall  be  the  duty  of  the  officer  making  the 

deposit  to  safely  keep  all  evidence  of  indebtedness  issued 

by  banks  for  deposits  made  therein,  and  bonds  deposited 

for  security  and  such  public  officer  shall  be  responsible 

for  such  evidence  of  indebtedness,  and  for  bonds  held  as 

security  therefor,  together  with  the  interest  thereon  and 

the  proceeds  of  any  sale  of  such  bonds;  and   the  city,   city,  county,  etc., 

....  f  1*1  '  1        etL  Lll    responsible  to  bank 

county  or  municipality  for  which  said  oincer  acts,   shall  for  return  of 
be  responsible  to  such  bank  for  the  safe  return  of  the 
securities  furnished  by  it  to  such  officer. 

Section  1  0.     The  expenses  of  transportation  of  moneys  Expensec  of  trans- 
porting deposit 
to  or  from  the  state,   county  or  municipal   treasuries  to  moneys. 

such  depositaries  shall  be  borne  by  such  depositaries. 

[2111 


Public  Deposits BLYTH.  WITTER  &  CO. 

Making  profit  from,       Section   1  1 .     The  making  of  profit  out  of  county,  city, 

or  unlawful  use  of,  =>  r  -j  ^ 

public  moneys,  towTi  or  Other  public  moneys,  or  using  the  same  for  any 
purpose  not  authorized  by  law  by  any  officer  having  pos- 
session or  control  thereof,  shall  be  a  felony.  Any  viola- 
tion of  the  provisions  of  this  act  by  a  bank  or  a  banking 
corporation,  shall  be  punishable  by  a  fine  not  exceeding 
Penalty  for  vioUt^ion  ^^^  hundred  dollars  for  each  offense  and  the  officers  of 
such  bank  or  banking  corporation  and  officer  receiving 
such  deposit  shall  be  guilty  of  a  felony. 

Nothing  herein  to       Section  12.     Nothing  in  this  act  contained  shall  prevent 

prevent  investment  .    .        ,.  -ii   •       .i   •         .     .       t  i 

or  disposition  of  pub-  any  county  or  municipality  within  this  state  rrom  buying 

lie  moneys  as  now  ,  ,  i  •  •  .^-  '^ 

provided  by  law.  Donds  Or  Otherwise  investing  its  money  in  any  manner 
now  provided  by  law  and  nothing  therein  contained  as 
to  the  disposition  of  interest  on  public  moneys  deposited 
shall  apply  to  any  money  received  or  held  by  any  county 
or  municipality  wherein  any  law  provides  for  the  payment 
of  interest  or  profit  thereon,  into  any  particular  fund. 

Conflicting  acts       Section   1  3.      All  acts  or  parts  of  acts  in  conflict  with 

repealed. 

this  act  are  hereby  repealed. 

Section  1  4.     This  act  shall  take  effect  immediately. 


[212] 


BANK  ACT  OF  CALIFORNIA 
INDEX 

Section 

Acceptances,  bankers',  purchasable  by  savings  banks 67 

Eligible  for  savings  banks 61,  67 

Commercial  bank  limitations  80 

Issued  under  Edge  Act,  legal  for  savings  banks 61 

Of  corporations  formed  under  "Investment  Companies  Act" 61 

Savings  bank  limitations   61,  67 

To  furnish  dollar  exchange 80 

Accounts  of  departments  to  be  kept  separate 26 

Act,  applicability  of  - I 

Applicable   to   certain    corporations I 

Applicable  to  violators  of  provisions  of 1,  145 

Effective  when  1  47 

Repeals  all  acts  in  conflict 146 

Action,   against  bank   for  escheated  deposits 1  5 

Against  merging  corporations  31b 

Against  selling  bank,  limitation  of  period  for 3  I 

Against  superintendent  of  banks  134,  136,  142 

Brought  under  bank  act,  jurisdiction  in 136b 

For  sale  of  real  estate,   v^^hen 54 

May  be  maintained  by  superintendent  of  banks  to  dissolve  bank 135a 

Report  of  examination  prima   facie  evidence 142 

To   recover  penalties  by  attorney   general 144 

Adjustment  of  investments  made  prior  to   this  act 145 

Administrator,  deposits  of  money  with  trust  company 9  1 

Deposits  of  personal  property  with  trust  company 95 

Deposits  with  banks  51 

Eligible  as  directors  10 

Trust  company  may  act  as;  oath  required 90 

Administrator,   Public,   deposits  with  trust   company 92 

Advertising  as  bank,   restrictions  on 12,   12a 

As   savings   bank    _ 49 

As  trust  company,  by  national  banks 48a 

As  trust  company,  restrictions  on 12,  12a 

Commercial  bank  must  use  word  "commercial" _ 28 

Savings  bank  must  use  word   "savings" 28 

Trust  company  must  use  the  word  "trust" 28 

Advertisement,    building    and    loan    association    may    not    advertise    as    savings 

bank  12 

For  deposits,   prohibited  when 12 

Of  banks,   regulated  28 

Of  bonds  and  securities  limited 61a 

[213] 


BLYTH,  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

ADVERTISEMENT— Continnei  ^^''^l^o 

Of  branch  offices,  regulated 28 

Of  capital  must  show  amount  paid  up '^ 

Of    conversion,  state  bank  into  national  bank 56a 

Of   resources  and  liabilities  with   those  of   other  banks   prohibited  unless 

separately  shown  '  ^ 

Of  a  sale  of  banking  business ^  ' 

Of  unauthorized  banking   prohibited '2,  12a 

Penalty  for  false,  in  re  bonds 61a 

Savings  shall  not  be  advertised  by   whom 49 

Surplus  must  show  separate  from  undivided  profits 14 

Advisory  Board,  loan  to  member  by  commercial  bank 83 

Affidavit  of  publication  notice  of  sale - 3' 

Reports  of  trust  companies  '0' 

Reports  of  banks 130,  I  30a 

Agency  of  foreign  bank  may  be  examined  by  superintendent 124 

Agent  commercial  bank,  as -* 

Liability  for  fraud  or  omission  of  duty 38 

Of  foreign  bank  must  take  oath '  ' 

Of  savings  bank,  not  officer  or  director  may  borrow 65 

Of  commercial  bank,  loan  to 83 

Overdraft  of,   prohibited   39 

Person  collecting  school  savings  deemed  agent  of  banks 9 

Purchase  of  assets  or  obligations  of  bank  by 41,  42 

Restrictions  on  purchase  of  assets  or  obligations  of  bank 41,  42 

Special  deputy  superintendent  of  banks  in  liquidating  bank 136 

Superintendent  of  banks  accepts  process  for  foreign  bank 7 

When  commercial  bank  may  act  for  insurance  company 5 

Agents,  loans  to  "5,  83 

Agreement  of  consolidation  must  be  filed 31a 

Of  consolidation  must  have  approval  of  superintendent 31a 

Of  merger  filed  with  superintendent 31b 

Of  merger  must  be  approved  by  superintendent 31b 

Of  purchase  and  sale  31 

Amendment  corporate  changes,   certificate  filed  with  superintendent 8 

Of  articles  of  incorporation,  see  Sec.  362  and  290a,  Civil  Code,  Appendix. 

Of  articles  of  incorporation  must  be  filed  with  superintendent 8 

Of  by-laws  filed  with  superintendent 8 

To  articles  or  by-laws  not  effective  until  filed  with  superintendent 8 

Amortization  of  bonds  by  savings  banks 61 

Of  bonds  may  be  determined  by  superintendent 61 

Annexation  of  city,  effect  on  banks  and  branch  offices 23,  60,  82 

Annual  Report  of  superintendent  of  banks  to  contain  what 140 

Copies  printed  for  distribution 140 

[214] 


INDEX 

BANK  ACT  OF  CALIFORNIA — Continued 

Section 

Appeal  to  Court  from  order  of  superintendent  of  banks 134,  136 

From   seizure  of  bank  property  134,   136 

Application  for  license  to  transact  banking  business 127,   128 

For   branch   office   license   9 

Stockholders  may  petition  for  dissolution 137 

To  establish  foreign  branch  58 

To  organize  banking  corporation 127 

Appointment  of  appraisers  In  certification  of  bonds 61a 

Of  attorney,  chief  deputy  examiners  and  assistants  by  superintendent 121 

Of  special  deputy  superintendent  of  banks 136 

Of  superintendent  of  banks  120 

Apportionment  commercial  bank  capital  and  surplus 82 

Departmental  bank  capital  and  surplus 23 

Savings  bank  capital  and  surplus 60 

Of  capital  and  surplus,  permission  for 23 

Of  capital  and  surplus  to  court  trust  business 90 

Of  capital  and  surplus  to  private  trust  business 90 

Appraisement  of  securities 61a,  99,  124 

Of  securities  assigned  to  treasurer  by  trust  companies 99 

Appraisers,  fee  for  examinations  incidental  to  trust  deposits 99 

May  be  appointed  in  examination  of  bank's  securities 124 

Approval  of  superintendent  of  banks  of  purchase  and  sale  agreement 3  I 

Of  superintendent  of  banks  of  consolidation  agreement 31a 

By  superintendent  of  banks  of  merger  agreement 31b 

Articles  of  Incorporation  affected  by  bank  act 8,  145 

Amendments  must  be  filed  v^rith  superintendent 8 

Certified  by  secretary  of  state  8 

Filed  v/ith  superintendent  of  banks 8 

May  provide  for  departmental  banking 22 

Of  consolidated  bank  31a 

Of   trust    company 90 

Violation  of,  by  banks,   duty  of  superintendent 134,   1 35a,  136 

Assessment  against  banks  for  state  banking  fund 123 

As  prior  lien  on  real  estate 57,  57a 

Capital    stock    impaired    133 

Effect  if  bank  fails  to  pay 123 

Governmental,  effect  as  lien  on  real  estate 57,  5  7a 

Assessment  of  Stock,  stockholders  must  be  notified 133 

Refusal   of  stockholder  to  pay,   effect 133 

Assets,  commercial  bank  may  pledge  for  borrowed  money  to  what  extent 21a 

May  not  be  carried  in  excess  of  actual  cost 45 

Of  banks,    relation   of  loans  thereto 44 

Of  each  department  held  for  its  depositors 27 

[215] 


BLYTH.  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

ASSETS — Continued.  Section 

Of  each  department  to  be  kept  separately 26 

Overdrafts  limited  to  ninety  days 21a 

Purchase  of  by  officers,   directors,  agents,   employees 41,42 

Relation   of   commercial  bank  bond  investments   to 36,  46 

Relation  to  bond  investments  of  commercial  bank 36,  46 

Savings  bank  may  pledge  for  borrowed  money  but  governed  by  superin- 
tendent          62 

Shall  not  be  mingled  writh  trust  funds 32 

Shall  not  be  pledged  to  give  preference 2  la 

Assignee,  deposits  of  money  with  trust  company 91 

Deposits  of  personal  property  with  trust  company 93 

Deposits  with  banks  51 

Trust  company  may  act  as;  oath  required 90 

Assistants  of  state  banking  department  appointed 121 

Attorney,  designation  of  superintendent  of  banks  by  foreign  corporations 7 

For  state  banking  department  121 

May  be  employed  in  liquidating  bank 136 

Attorney  General,  actions  brought  by,  to  recover  penalties 144 

Duties   relative   to   escheated   deposits 15 

Audit  of  bank's  affairs  may  be  made  by  superintendent 124 

Auditor  appointed  by  superintendent  to  audit  bank 124 

Authorization  certificate  for  branch  office 9 

Certificate  for  commercial  bank  127,  128 

Certificate   for  foreign   bank 7 

Certificate  to  representative  of  foreign  bank  or  trust  company 12c 

Certificate  for  savings  bank  127,  128 

Certificate  for  trust  company 127,  128 

Bad  Debts,  sale  or  compounding  of  bad  or  doubtful  debts 136 

What   are   21b 

Bailee,  savings  banks  may  act  as,  for  United  States  securities 70 

Banks,  advertising  as,   restrictions  on 12,  12a 

Advertising  as  savings  bank   49 

Advertising   capital   of   14 

Applicability  of  act  to 145 

Application  to  do  business 127,  128 

Articles  of  incorporation  8,  128 

Assessed  for  state  banking  fund 123 

Banking   corporation,   how   organized 3,   127,  128 

Bond  investments,  savings 61 

Bond   investments,    commercial 36,  46 

Borrowing  money  2  la,  62 


[216] 


INDEX 

BANK  ACT  OF  CALIFORNIA — Continued 

Section 
BANKS — Continued.  eg 

Branch    for    foreign    business 

Branch  office  

Called    report  

Conducting    safe    deposit    department 

Capital    impaired    

Capital    stock    

Ceasing  business,  must  take  what  action I^oa 

Classified  as  to  capital  by  population 

Classified  as  commercial,  savings  and  trust 

Commercial,  purposes  of  

Conducting  business  in  unsound  manner '^^'   '-'-'a 

Connection  with,  by  superintendent  of  banks  prohibited 120 

Consolidation  of  

Conversion   into    national   banks ^ 

Defined  

Departmental,  separate  books  to  be  kept 

Departmental,  shall  make  reports  separately '29 

Departmental,  shall  publish  statements  separately '29 

Deposit  with,  does  not  create  debt  within  certain  meaning 55 

Dissolution  of,  by  process  of  law I  35a 

Dissolved,  funds  of 

Depositary  of  trust   funds 

Distribution  of  funds  of  insolvent '^^ 

Escheat   of   unclaimed   deposits '  ■* 

Examination  of,  by  court '-'" 


Examination  of,  by  directors 


139 


Examination  annually     ^* 

Examination  of,   when  failing  to   report '^o 

Examiner,  failure  to  report  insolvent  condition 126 

Examiner,  must  file  oath  '2^ 

Examiner,  shall  not  act  as  receiver,  when '25 

Expiration  of   corporate   existence lioa 

Extra  examination,   expanse  of '^^ 

Failure  to  make  report,   penalty '38 

Federal   reserve,   exempt   from   examination ^O 

Fines,  may  be  compromised  before  action  instituted 144 

Foreign,   inspection  of  '•^^ 

Foreign,  see  Foreign  Banking  Corporations, 

Forfeitures,   how  recovered '  44 

Forfeitures,  may  be  compromised  before  action  instituted 144 

Funds,  when  deposited  with  other  banks 43,  68,  85 

Impairment  of   capital 133,   136 

In  liquidation,  names  posted '4' 

[217] 


BLYTH,  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

3ANKS— Continued.  Section 

Insolvent  when  fails  to  restore  reserves 30 

Insolvent  condition  of,  failure  to  report 126 

Inspection  of  by  superintendent  of  banks 124 

In  unsafe  condition 1  36 

Investments,  changed  to  conform  to  act 145 

Investments  in  own  stock  prohibited 34 

License  to  foreign  corporation 7 

Limited  time  to  repair  capital 133 

Limited   time   to    report 138 

Limited  to  investment  in  safe  deposit 30,  37 

Liquidation  of,  by  superintendent  of  banks 136 

Loans  on  own  stock  prohibited 34 

Loan  on  stock  of  other  bank 44 

May  acquire  stock  in  safe  deposit  corporation,  when 37 

May  acquire  stock  in  stock  company,  when 37 

May  apply  to  court  to  dissolve 137 

May  be  cited  to  show  cause 134 

May  be  closed  by  superintendent  of  banks 136 

May  conduct  safe  deposit  department 30 

May  be  consolidated,   how Sec.  3  la 

May  engage  in  foreign  banking,  how 58 

May  join  federal   reserve  bank 56 

May  not  acquire  corporate  stock;  exceptions 37 

May  purchase  real  estate,  when 61,  84,  105 

May  purchase  safe   deposit   corporation  stock 37 

May  purchase  trust   company  stock 37 

May   resume  business,   when 136 

May  sell  business  31 

Meaning  of  word 2 

Member  federal  reserve  bank  subject  to  state  law 56 

Merger  of  3  lb 

Must  carry  assets  at  actual  cost 45 

Must  have  certificate  of  superintendent  of  banks 24 

Must  liquidate,  when 1  36a 

Must  sell  or  exchange  other  real  estate,  when 54 

Mutual,   may  have  capital  stock 29 

Must   post   license 50 

Name,  change  of,  see  Sec.   1278,  Code  of  Civil  Procedure,  Appendix. 

Name  not  to  be  similar  to  that  of  other  bank 127 

Must  sell  stock  acquired 37 

National,  examination  of 48 

National   examination  of  trust  department 48a 

National  bank  may  become  state  bank 56b 


[218] 


INDEX 

BANK  ACT  OF  CALIFORNIA — Continued 

BANKS— Continued.  ®®°i*4? 

New,  information  of,   to  be  posted '^' 

...  43 

Nomination   of   depositary f 

Not  to  purchase  unless  permitted  by  superintendent,   note,   bond  or  con- 
tract in  which  officer,  director,  employee  or  controlling  stockholder 

interested    

Notice  when   converting  into  national  banks 5oa 

Obligations  or  assets  of,   when  purchased  by  officers,    directors  and   em- 
ployees   - 4  1 .  42 

Organization  of,   previous  consent  of  superintendent   required 127 

Penalties   imposed,    how    recovered '44 

Penalties  pecuniary,  may  be  compromised  before  action  instituted 144 

Publication   of   report   of '^2 

Publication  of  unclaimed  deposits '5 

Purchase   of   ^  ' 

Refusal  to  observe  order  of  superintendent  of  banks 136 

Refusal  to   submit  books 135a,  136 

Remittance  for  state  banking  fund '23 

Report  of,   to  superintendent  of  banks 130 

Sale   of   3  I 

Savings,   purposes  of 4 

Signs  must  show  business   conducted ■^O 

Special  report  may  be   required I  30a 

Stationery  must  show  business  conducted 28 

Stock,   minimum  par  value,   except 53 

Suspending  payment  of  obligations 135a 

Trust  company,  purposes  of 6 

Use  of  term  restricted 12 

Violation  of  articles  of  incorporation 134,   135a,   136 

Voluntary  liquidation  1  36a,  1  37 

When  unsafe  to  continue  business 135a 

Without   capital   stock 29 

Bank  Acceptances,  by  commercial  bank 80 

By  savings  bank 67 

Savings  bank  limited •^ 67 

Commercial   bank    limited 80 

Bank  Act,  amendment  to  desired  by  superintendent  of  banks 140 

Applicability   of   1,145 

Applicable  to  certain  corporations 1 

Applicable  to  violators  of  provisions  of 1,  145 

Effective  wrhen  ■  47 

Jurisdiction  in  actions  brought  under 136b 

Repeals  all  acts  in  conflict 146 

Report  of  superintendent  as  to  desirable  amendments 140 

[219] 


BLYTH.  WITTER  &  CO. 


BANK  ACT  OF   CALIFORNIA — Continued 

BANK  ACT— Continued.  ^^i*i°^ 

Relation  to  prior  investments '43 


Title 


Banking,  by  foreign  corporations i 

Defined  2 

Corporation  to  conduct  organized  by  not  less  than  three  natural  persons..  3 

May  be  conducted  only  by   corporation 2 

Restricted  to  certain  corporations '3 

Bank  Premises,  all  departments  to  be  conducted  in  same  or  adjoining  building; 

exception  trust  department 26 

Investment  in,  by  commercial  banks 84 

Investment  in,  by  savings  banks 61 

Investment  in,   by  trust   company "05 

Trust  company  may  mortgage  to  state  treasurer,  when 97 

Bills  of  Elxchange,  commercial  banks  may  buy  or  discount 80 

Commercial   banks   may   accept,   when 80 

Eligible  for  savings  banks 0/ 

Not  construed  to  create  debt,  within  certain  meaning 55 

Bills  Payable,  see  Borrowed  Money. 

Bond  of  special  deputy  superintendent  of  banks 136 

Of  chief  deputy  superintendent  of  banks 121 

Of  superintendent  of  banks 120 

Trujit   company   not   required  to   give 94 

Bonds,  advertising  legality  of  for  savings  banks 61a 

Amortization  of  61 

Certified,  official  list  to  be  kept 61a 

Commercial   banks   limited   in   investing 36,  46 

Corporate,   foreign  corporation  may  act  as  trustee 90 

Cost  of  investigation  of 61a 

Eligible  for  deposit  by  trust  company  with  treasurer 96 

Foreign  corporation  may  buy  and  sell  bonds 12c 

Irrigation  district,  investment  in  by  savings  bank 61 

Legal  investments  of  savings  banks 61 

Of  foreign  government  may  be  certified  for  savings  banks 61 

Of  state,  available  for  investment  by  savings  banks 61 

Penalty  for  illegal   advertisement  of 61a 

Power  of  superintendent  of  banks  to  investigate 61a 

Public  utility 61 

Railroad    61 

Savings  banks  limited  in  investing  in 67 

United  States,  loan  on  by  commercial  bank 80,  83 

Savings  banks  may  acquire  for  debt 61 

Transfer   of,   betv^reen   departments 25 

United  States  savings  banks  may  loan  on 67 

[220] 


INDEX 

BANK  ACT  OF  CALIFORNIA — Continued 

Section 

Books,  audit  of,  by  request 124 

Must  show  actual  cost  of  assets 45 

Of  departments  to  be  kept  separate 26 

Refusal  of  bank  to  submit 135a,   136 

Borrowed  Money,  by  commercial  bank  to  purchase  U.  S.  securities 21a 

By  savings  bank  to  purchase  U.  S.  securities 62 

By  savings  bank  must  be  approved  by  superintendent 62 

Commercial  bank  may  pledge  assets,  to  what  extent 21a 

Elxcess  loan  to  savings  bank  not  invalid  as  to  lender 62 

Limitations  on,  commercial 2  la 

Limitation   on   savings 62 

Rediscounts  by   commercial  bank 21a 

Rediscounts  by  savings  bank  permitted 62 

Savings  bank  must  report  to  superintendent 62 

State,  county,  city  or  other  funds,  see  Public  Deposit  Acts,  Appendix. 

Superintendent  of  banks  may  extend  limit  to  commercial  bank 21a 

United  States  or  postal  money  by  commercial  bank 21a 

United  States  or  postal  money  by  savings  bank 62 

Borrower,  endorser  or  guarantor,   deemed  to  be 66 

Branch   Offices,    advertising   of 28 

Approval  of  superintendent  of  banks 9 

Capital  necessary  to  establish 9 

Capital  necessary  to  establish  foreign 58 

Certificate  necessary  to   open 9 

Elffect  of  consolidation  of  cities  on 23,  60,  82 

Fee  for  certificate  to   open 9 

Foreign   branch,    hov^   established 58 

May  not  be   discontinued  without   consent  of  superintendent 9 

Of  foreign  corporations 7 

Penalty  for  maintaining  without   certificate 9 

Regulations  governing  advertising  and  stationery 28 

Removal  of  23 

Report  of  foreign   branches 58 

Right    to    establish,    in    foreign    country    or    dependency    or   possession    of 

United  States  58 

Signs  of,  must  show  what 28 

Window  signs  and  stationery  must  show,  what 28 

Broker,  v^hen  commercial  bank  may  act  as 5 

Building  and  Loan  Association,  activities  permitted 12,   12a 

Advertising,    how    restricted 12,  12a 

May  accept  savings  for  which  certificate  or  shares  must  be  issued 12,  12a 

Savings  bank,   not  to  advertise  as 12,  12a 

[221] 


BLYTH.  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

Section 

Bulletin,  information  to  general  public I  4  1 

To  be  filed  as  public  document 141 

To  be  posted  by  superintendent  of  banks I  4  1 

Business,  see  Bank — Banking. 

By-Laws,   amendments  must  be  filed  with  superintendent 8 

Must  be  filed  with  superintendent  of  banks 8 

Of  savings  banks  must  prescribe  rules  governing  savings  deposits 64 

California  Bonds,  legal  for  savings  banks 61 

Called  Report,  of  bank,  publication  of 132 

Penalty  for  failure  to  render 138 

Publication   of  statement I  32 

Required  how   often  131 

Time  limited  for  bank  to  render 138 

To  coincide  with  call  of  comptroller  of  currency,  when. 1  3  1 

To  contain  what 130,   130a 

Capital,  advertised  or  published,   how 14 

Amount  necessary  to   establish  foreign   branch 58 

Apportioned  between   departments 23 

As  security  for  performance  of  trusts 90 

Assigned   by   foreign    corporation 7 

Commercial  bank,    governed  by  population 82 

Commercial  bank,   relation  to  deposit  liability 19 

Departmental    bank    23 

Impairment    of    I  33,  1  36 

Increase  or  decrease  of  authorized  capital,  see  Sees.  359  and  290a,   Civil 

Code,  Appendix,  and  Sec.  8,  Bank  Act. 
Invested  in  bank  premises,  furniture  and  fixtures  and  safe  deposit 

vaults    61,  84,  105 

Maintained  by  selling  bank 31 

May  be  increased  by  conversion  of  surplus 21 

May  be  reapportioned  betv^reen   departments 23 

May  be  paid  up  before  issuance  of  certificate 127 

Necessary   to   open   branch   office 9 

Not  required  against  public  deposits  or  postal  savings  when  secured 19 

Of  commercial  bank,  relation  to  deposits 19 

Of  foreign  corporation  to  be  separate 7 

Of  savings  bank,  governed  by  population 60 

Of  savings  bank,  in  what  invested 61 

Of  savings  bank,   relation  to  deposits 19 

Of  savings  bank,  relation  to  deposit  liability 19 

Of  title  insurance  company  transacting  trust  business 106 

Of  trust  company,  how  invested 105 

Of  trust  company  required 90 


[222] 


INDEX 
BANK  ACT  OF  CALIFORNIA— Continued 

CAPITAL — Continued.  Section 

Permission  to  segregate  for  department 23 

Reapportionment    to    departments 23- 

Relation  to  payment  for  state  banking  fund 123 

Relation  of  surplus  to 21 

Security  to  depositors  and  stockholders 2  \ 

Trust  company,  how  invested 105 

Capital  and  Surplus,   relation  to  acceptances  by  savings  bank 67 

Relation  to   deposit  liabilities 19 

Relation  to  loans  by  commercial  bank 80 

Relation  to  loans  by  savings  bank 67 

Capital  Stock,  assessed  when  133 

As   collateral,    limited 44 

Banks  shall  not  invest  in  their  own 34 

Banks  shall  not  loan  on  their  own 34 

Certificates    of 53 

Certificate  of  increase  or  decrease  filed  with  superintendent  of  banks 8 

Diminution  of  55 

May  be  sold  for  assessment 133 

Of  corporations  engaged  in  foreign  banking,  banks  may  purchase,  when..  58 

Of  safe  deposit   corporation,   investment  in 37 

Of  trust   company,   investment   in 37 

Par  value  must  be  one  hundred  dollars,   exception 53 

Reduction  of,  restricted 55 

Sale  of,  when  acquired  by  bank 37 

When   not  to  be   decreased 23 

Census,  as  basis  for  classification 23 

Certificate,  mortgage  participation,  legality  for  savings  banks 61 

Mortgage  participation,  when  available  for  deposit  by  trust  company  with 

treasurer     96,  99 

Necessary  before  transaction  of  business 24 

Necessary  for  new  department 24 

Of  superintendent  of  banks  in   consolidation 3  la 

Of  superintendent  of  banks  to  be  posted  in  banking  room 50 

Fee  required  24 

To    open   branch   office 9 

Certificate  of  Deposit,  bank  cannot  make  partial  payments  on 21a 

Does  not  create  debt  within  certain  meaning 55 

Savings   bank   may   issue 63 

Certification  of  Bonds,  certificate  may  be  revoked 61a 

Certificate  of  railroad  or  other  utility  bonds  expires,  when 61a 

Does  not  obligate  state 61a 

Powers  and  duties  of  superintendent 61a 

Renewal  within  discretion  of  superintendent 61a 

[223] 


BLYTH,  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA— Continued 

Section 

Certified   Checks,    issuance   unlawful,    when 52 

Must  be  immediately  charged ^ 52 

Checks,   certified,   must  be  charged  immediately 52 

Certified,   when   unlawful 52 

Chief   Deputy,    appointed 1  2  1 

Duties  in  event  of  disability  of  superintendent  or  vacancy  of  his  office 1  2  1 

Failure  to   report  insolvent  condition  of  bank 126 

Oath  of  office;  time  limit  of  filing 121 

Qualifications   1  2  1 

Citation,  issued  by  court  on  sale  of  real  estate  owned  by  bank 54 

Issued  to  bank  by  superintendent 134 

City,  assessment,  effect  as  first  lien 57,  57a 

Bonds  as  investments  for  savings  banks 61 

Bonds    of    city   in   this    state    eligible    for   deposit   by    trust    company    Avith 

treasurer 96 

Annexation  or  consolidation,  effect  on  banks  and  branch  offices 23,  60,  82 

Deposits,  see  Public  Deposit  Act,  Appendix. 

Claims  against  bank  in  liquidation 136 

Classification,  as  applied  to  banks  previously  organized 23,  60,  82 

Of   banks   2 

Of  cities,  governed  by  federzd  census 23,  60,  82 

Of  cities  with  reference  to  capital 23,  60,  82 

Of  cities  with  reference  to  population 23,  60,  82 

Of  trusts — court  and  private  101 

Clerk,  overdraft  prohibited 39 

Club,  loans  to,  exemptions  in  favor  of 65,  83 

Collateral,   savings  bank   collateral 67 

Collateral  Trust  Bonds,  when  legal  for  savings  banks 61 

Commercial  Bank,  acceptances  to  furnish  dollar  exchange 80 

Accepting   drafts   or  bills  of  exchange 80 

Advertising,   how  regulated  28,  49 

Agent  for  fire,  life  or  other  insurance  company 5 

Bond    investments    limited 36,  46 

Borrowed    money    2  la 

Broker  in  making  or  procuring  real  estate  loans 5 

Capital  and  surplus  to  deposits 1  9 

Capital  with  reference  to  population 82 

Defined  5 

Deposits  with  other  coninvercial  bank  may  be  limited  by  superintendent..         85 

Depositaries   68 

Directors  of,  loans  to 83 

Employees   of,   loans  to 83 

Insurance  company,   agent  of 5 


[224] 


INDEX 

BANK  ACT  OF  CALIFORNIA— Continued 

COMMERCIAL  BANK— Continued.  Section 

Investment  in  bank  premises 84 

Investments  in  bonds 36,  46 

Interest  unpaid  for  one  year,   effect 21b 

Limitations  on  acceptances 80 

Limitations   on   loans 80,  8  1 

Loans  on  U.  S.  securities  unlimited;  margin  necessary 80 

Loans   to   affiliated   bank 83 

Loans   to   directors  and   employees 83 

Loans   to    directors,    agents   or   employees    on   U.    S.    securities    permitted 

without   report 83 

Loans  to  members  of  advisory  board 83 

Loans  to  one  borrower  limited 80 

Loans  to   officers  prohibited 83 

May  accept  drafts  or  bills  of  exchange 80 

May  borrow  state,  county,  city  or  other  public  money 21a 

See  also  Public  Deposit  Acts,  Appendix. 

May  borrow  U.  S.  or  postal   money 21a 

May  pledge  assets  to  what  extent 2  la 

Not  to  advertise  for  savings 49 

Not  to   conduct  savings  business 49 

Officer  may   not  borrow 83 

Overdraft  may  not  be  carried  more  than  ninety  days 21b 

Powers  of  5 

Prohibited  loan  must  be  reported  if  made 83 

Purposes    of   5 

Ratio  of  capital  and  surplus  to  deposits 19 

Real  estate  loans  restricted 80 

Real  estate  loan  to  be  first  lien 47 

Rediscount  with   federal   reserve   bank 21 

Reserves  required  20 

Restrictions   on   brokerage   and   insurance   agency 5 

Selling  real  estate  may  take  subordinate  lien 47 

Shall  not  guarantee  insurance  premium 5 

Unsecured  loaning  limit  80 

Commercial  Paper,  commercial  banks  may  buy  or  discount  limitations 80 

Loans  on,  by  commercial  banks  limited 80 

Savings   bank   investments   

Commission,  to  officer,  director,  agent,  teller,  clerk,  employee  prohibited 39 

Consolidation  Agreement,  approval  of 31a 

Recitals   of   3  la 

Consolidation  of  Banks 3  la 

Consolidation  of  Cities,  effect  on  banks  and  branch  o£fices 23,  60,  82 

[225] 


BLYTH,  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

Section 

Contract,  purchase  of,  if  directors,  officer,  employee  or  controlling  stockholder 

interested,   requires  consent  of  superintendent 35 

Conversion  of  national  bank  into  state  bank 56b 

Of  state  bank  into  national  bank 56a 

Notice  to  savings  depositors 56a 

Branch  office  licenses  that  may  be  revoked 56a 

Certificate  of  comptroller  to  be  filed  with  superintendent 56a 

Corporate  Existence,  if  expires  bank  to  liquidate 136a 

May  be  extended — see  Civil  Code. 

Of  consolidating  bank   31a 

Of  merging  banks  31b 

Corporate  Changes,  certificates  of  filed  with  superintendent  of  banks 8 

Corporations,   club,   exemptions  in   favor  of  loaning  to 65,  83 

Doing  title  insurance  and  trust  business 107 

Loans  to  by  comm,erciaI  bank  if  officers  interested 83 

Loans  to  by  savings  bank  if  officers  or  directors  interested 65 

Membership,   exemptions  in  favor  of  loaning 65,  83 

Mortgage    insurance,    securities    of,    as    deposit    by    trust    company    with 

treasurer     — 96,  99 

Mutual,   may  elect  to   have   capital   stock 29 

Powers  and  privileges  abridged  by  this  act 145 

Prohibited  loans  to  must  be  reported 65,  83 

Religious  exemption  in  favor  of  loan  to 65,  83 

Stock  as  investment  for  banks  limited 37 

Stock   of  as  collateral,   limited 44,  67 

To   conduct  banking   or  trust  business   organized  by    not  less  than   three 

natural    persons    2 

Transmitting  money  to  foreign  countries I  3 

Use  of  words  "bank,**   "banking,**   etc.,   restricted 12 

Use  of  word  "savings**  restricted 12,  12a,  49 

Corporations,   Foreign,   see  Foreign  Banking  Corporations  and   Foreign  Trust 
Company. 

Costs,   in   liquidation   of  bank 136 

In  sale  of  real  estate  by  court 54 

Counsel,   compensation,   liquidating  delinquent  banks 136 

County,  assessment,  effect  as  first  lien 57,  57a 

Bonds,  as  investment  for  savings  banks 61 

Bonds  eligible  for  deposit  by  trust  company  with  treasurer 96 

Deposits,  see  Public  Deposit  Acts,  Appendix. 

Court,  appeal  to  from  order  of  superintendent 134,   136 

Appeal  to  from  seizure  of  bank  property 134,  136 

Authorizing  deposit  with  bank  by  executor,  trustee,  etc 5  I 

Authorizing  deposit  of  money  with  trust  company 9  1 


[2261 


INDEX 

BANK  ACT  OF  CALIFORNIA — Continued 

COURT— Continued.  ^®'=*^°° 

Authorizing  deposit  of  personal  property  with  trust  company yi 

Jurisdiction  in  sale  of  real  estate  held  by  bank 54 

May  require  knowledge  of  private  trusts '03 

Court  Trusts,   capital  as  security   for  performance  of 90 

Defined  '  ^  ' 

Secured  separately  by   deposit  with  treasurer 96 

When  deemed  to  include  private  trust 101 

Creditors,   preference   shall   not  be   given - 21a 

Rights  in  consolidation  of  banks 3  la 

Rights  in  liquidation  of  bank '^" 

Rights  in  merger  of  banks 3  lb 

Rights  when   banking  business   sold 3  I 

Debt,  deposit  with  bank  does  not  create  debt  within  certain  meaning 55 

Savings  banks  shall  not  contract,  except 62 

When  to  be   charged  off ~ 21b 

Deceased  Depositor,  amount  due  to  must  be  reported 1  5 

When  deposits  escheat '  ^ 

Decedent,   deposits  of ^^'/i 

Definition,    Of   bank  

Of  commercial  bank ■* 

Of  commercial  paper  eligible  for  savings  banks 67 

Of   "reserve   depositary"    20 

Of    "reserves   on   deposit"    2U 

Of    "reserves  on  hand"   ^0 

Of  savings  bank  ^ 

Of   "total   reserves"   20 

Of   trust   company " 

Department,  capital  to  be  apportioned  to 23 

Certificate   for  new  department  necessary 24 

Purchase    of   business   of 3  I 


Safe   deposit 


30 


Sale    of   business   of 3  I 

Separate   administration    of ^^ 

Shall  not  deposit  with  other  department;  exception 25 

Departmental  Bank,  application  to  conduct 23 

Assets  of  each  department  held  for  its  depositors 27 

Assets  to  be  kept  separate 2o 

Books  of  account  to  be  kept  separate 26 

Business  of  all  departments  to  be  conducted  in  same  building 25 

Cash,  securities  and  property  of  departments  not  to  be  mingled 25 

Classified  as  to  capital  by  population 23 

Conversion  into   national  bank 56a 

Departments  to  be  in  same  or  adjoining  building;  exception 26 

[227] 


BLYTH.  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

DEPARTMENTAL  BAITK— Continued.  Section 

Investments,    books   and    accounts    of    each   department    to    be    separately 

kept    25 

New   department    must    receive    certificate 24 

Publish  statements  of  departments   separately 129 

Reapportionment  of  capital  and  surplus 23 

Reserves  required - 25 

Sale  or  transfer  of  assets  between  departments 25 

Separate  reports  of  each  department 129 

Transfer  of  deposit  between  departments 25 

Transfer  of  loans  between  departments 25 

Trust  department  may  be  conducted  in  separate  building  with  consent  of 

superintendent    25 

Department,  prerequisites  to  opening 24 

Depositary,  amount  savings  bank  may  deposit  with 68 

Commercial   bank    reserves 20 

Designation  by   superintendent   of  banks 43 

Federal  reserve  bank  may  act  as 43 

Federal  reserve  bank  need  not  be  designated  by  superintendent  of  banks  43 

National  bank  acting  as 48 

Savings  bank  as  bailee  for  United  States  bonds 70 

Savings  bank  reserves 68 

S^^^       Trust  company  may  act  as;   oath   required 90 

Depositors,    deceased    or   unknown I  5 

Have  priority  of  security  in  capital  and  assets 2  I 

May  \«thdraw  when  bank's  business  sold 5  I 

Money  of,  invested  in  stock  of  bank 34 

Of  savings  bank  converted  into  national  bank,  notice  to 56a 

Payment  of  on  dissolution 136 

Repayment  of  by  department 27 

Preference  to  prohibited 2  la 

Repayment  to  by  savings  banks 64 

Rights,  when  bank  sold 3  1 

Savings,  may  be  paid  by  draft 62 

Savings  bank  may  require  notice  of  withdrawal 64 

Unknown    '  5 

Deposits,  additional  with  treasurer  by  trust  company 98 

Advertising  for,  prohibited  when 12 

By   administrator    5  1 

By   assignee    5  1 

By   executor  5  1 

By    guardian  5  1 

By   order  of  court  5  1 

By   public   administrator   with   trust    company 92 


12281 


INDEX 
BANK  ACT  OF  CALIFORNIA — Continued 

DEPOSITS— Continued.  Section 

By    receiver    5  I 

By    trust  department  with  commercial  or  saving  department 25 

By    trustees  5  I 

Capital  and  surplus,  relation  to 19 

Certificate  of,  savings  bank  may  issue 63 

Departmental,  to  be  kept  separate 25,   26,  27 

Escheat,   when   '  5 

From  one  department  with  another 25 

Interest  on,   paid  by  trust  company 95 

In  trust  for  another  may  be  paid  to  beneficiary  if  trustee  dies,  when I  5a 

Joint   -    --  I  5a 

Must   not  be  increased,   when '9 

Notice  of  withdrawal  of 64 

Of  commercial  bank  with  another  commercial  bank  may  be  limited 85 

Of    estate  funds  with  trust  company 92 

Of   foreign   corporation    to   be   separate 7 

Of   or  for  niinor  may  be  paid  to  him 15c 

Of   other  banks  with  savings  banks 68 

Of   public  moneys  with  savings  bank 62 

Of   savings   bank,    relation   to   acceptances  67 

Of   savings   bank,    relation  to  loans  67 

Of   savings   banks  with  other  banks 68 

Of    trust  companies  with  state  treasurer  to  be  increased,  when 98 

Of   trust    companies   with   state   treasurer  96 

Of   trust    company  with  treasurer  securities  may  be  exchanged 96 

Of   trust    company    securities  with  treasurer  documents  and  appraisal 99 

Of    trust   department  with  savings  department 25 

Of   trust    funds  with  trust  company 91 

Percentage  of  deposited  with  one  bank 68-20 

Preferred  claim,  when 5  I 

Ratio  of  capital  and  surplus  to 19 

Reserves  required  against  commercial 20 

Reserves  required  against  savings - 68 

Savings,    repayment    of 64 

Soliciting  or  receiving  deemed  banking  business 2 

Transfer  of,  when  bank  sells  business 3  I 

Unclaimed,    law    governing I  5 

Unclaimed,  when  bank  suspends  business 136a 

When  bank  does  not  create  debt  within  certain  meaning 55 

With  federal  reserve  bank  by  state  bank 20-68 

With  national  bank  by  state  bank _ 48 

With  other  banks  to  be  assets  of  department  by  which  made 25 

With  treasurer  may  be  withdrawn  by  trust  company 98 

With  trust  company,  responsibility  for 94 

[229] 


BLYTH.  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

Section 
Deputy  Superintendent,  see  Chief  Deputy. 

Designation  of  depositary 20-43 

Director,   administrator   eligible   as 10 

Annual  examination  of  bank  necessary 139 

Bank  without  capital,  director  must  be  member  and  depositor 10 

Certificate  of  change  of  number  filed  with  superintendent  of  banks 8 

Commercial  banks,  loans  to 83 

Commission    to,    prohibited 39 

Declaration  of   dividends   by 2  I 

Eligibility  of  '  0 

Elxamination  of  bank  by  board  or  committee 139 

ELxecutor  eligible  as '  " 

Executor     or     administrator     holding     stock     in     representative     capacity 

eligible    10 

Increase  or  decrease.    See  sees.  361   and  290a  Civil  Code  Appendix. 

Increase  or  decrease  of " 

Liability  for  fraud  or  omission  of  duty 38 

May  be  removed,  when '  0 

May  require  examination  by  superintendent  in  lieu  of  theirs 139 

May  sell  stock  for  assessment '33 

Monthly  meeting  must  be  held '  ' 

Names  to  be  posted  in  bank '  ' 

Oath    required    - '  ' 

Overdraft   of,   prohibited 39 

Prohibited  loans  to,   must  be  reported 65-83 

Purchase  of  assets  or  obligations  of  bank,  by 41-42 

Qualifications    of    10-11 

Report  of  examination  to  contain,  what 159 

Sale  of  note,  bond  or  contract  to  bank 35 

'          Savings  bank,  may  not  borrow "5 

Savings  bank,  shall  not  be  endorsers 65 

Savings  bank  may  borrow  on  United  States  securities 65 

Sells  or  hypothecates  qualifying  stock — must  notify  superintendent 1  0 

Shall  levy  assessment,  when '33 

Discounts,  banks  of ^ 

Commercial   bank    may ^ 

Savings    bank    capacity 67 

Dissolution,  causes  for  '^" 

Involuntary     '  3o 

Bank  may  apply   to  dissolve '■'' 

Of  national  bank  to  enter  state  system 56b 

Voluntary,    proceedings  '  3  7 

[230] 


INDEX    

BANK  ACT  OF  CALIFORNIA — Continued 

Section 

District  Bonds,  those  eligible  for  deposit  by  trust  company  with  treasurer 96 

Those  legal  for  savings  banks 61 

Dividends,  accrued  but  unpaid  interest  not  calculated 45 

Banks    in    liquidation '  ^" 

Directors  may  declare,  under  what  conditions 21 

Escheat   to   state,   when *^' 

Escheated   to   state,   invested  how 137 

Increase  of  surplus  when  dividend  paid ■^  ' 

In  receivers*   hands,   how  disposed  of >J' 

Of    suspended    banks '  3°* 

Paid  out  on  court  order '3' 

Trust  company  may  receive  on  securities  deposited  with  treasurer 96 

Drafts,   acceptances  of,  by   commercial  bank 80 

Savings  depositors  may  be  paid  by "•^ 

Earnings,  disposition  of  ^' 

Edge  Act  Acceptances,  legal  for  savings  banks 61 

Employees,    commission  to,   prohibited •'' 

Liability  for  fraud  or  omission  of  duty 38 

Of  commercial  bank,   may  borrow 83 

Of  savings  bank,  may  borrow 65 

Of  state   banking   department '21 

Overdraft  of,   prohibited 39 

Purchase  of  assets  or  obligations  of  bank 4I,4Z 

Sale  of  note,  bond  or  contract  to  bank 35 

Entries,  penalty  for  false 30 

Endorser,  deemed  to  be  borrower,  when 66 

Equipment  Certificates,  of  railroads,  when  legal  for  savings  banks 61 

Escheat,  of  deposits,  duty  of  attorney  general  in  action 15 

Of  deposits,  duty  of  county  clerk,  in  action 15 

Escrow,  transacting  by  individuals  or  corporations  not  prohibited 2,  101 

Evidence,   of  joint  deposit '5a 

Of  seal  of  superintendent  of  banks 24a 

Examination,   by   directors   annually '39 

By  federal   reserve  bank  may  be  accepted  in  lieu  of  directors'    examina- 
tion        '39 

Causes   for  dissolution '  34,   I  JO 

Expense  of  bank,  when 58,   138,  139 

Federal   reserve  bank   exempted 48 

Of  banks,  before  issuance  of  certificate - 127 

Of  banks,   upon  failure  to   report 138 

Of  foreign  branch  offices 58 

Of  national  banks 48 

Of  organization  documents  by  superintendent   of  banks 8,  127 

[231] 


BLYTH.  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

EXAMINATION— Continued.  Section 

Of  securities  for  deposit  by  trust  company  with  treasurer 96,  97,  98,  99 

Of  state  bank  members  of  federal   reserve  bank 56 

Of  trust  department  of  national   bank 48a 

Report  of,  by  superintendent  of  banks,  prima  facie  evidence 142 

Special,    per   diem    charged 124 

Special  by  superintendent  at  request  of  directors 139 

Examiners,    appointed '  2  I 

Failure  to   report  insolvent   condition 126 

May  administer  oath I  24 

Oath  of,  miust  be  filed,  v^here 125 

Of  state  banking   department 121 

Shall  not  be  appointed  receiver,  v^rhen 125 

Elxecutor,  deposits  of  money  with  trust  company 91 

Deposits  of  personal  property  with  trust  company 93 

Deposits   with    banks 5  1 

Eligible  as  director 10 

Foreign  corporation  may  act,  when / 

Trust  company  may  act  as;  oath  required 90 

Expenses  of  state  banking  department 122,   123 

Elxpress  Company,  transmitting  money  to  foreign  countries 13 

Federal  Reserve  Bank,  commercial  bank  rediscounts  with 21a 

Depositary  without   designation 43 

Elxamination  by  may  be  accepted  in  lieu  of  directors'   examination 139 

Elxempt    from    examination 48 

Investment  in  stock  of  by  state  bank 56 

May  act   as  depositary  20,  43,  68 

Reserves  may  be  deposited  v^rith 20,  68 

Rediscount  with  by  savings  banks 62 

State   banks   may  join 56 

State   members   subject   to   state   laws 56 

Trust  company  member  may  continue  to  act  as  trust  company 90 

Regulations  of,    on  bankers*   acceptances 67 

Fee,   for  accepting  process  for  foreign  bank 7 

For  appraisal  of  trust  company  securities  deposited  with  treasurer 99 

For   branch   office   license 9 

For  certificate  to  transact  banking  business 24 

For   certificate  to   representative   of   foreign   corporation 12c 

For  examination  of  documents  accompanying  company  deposit  with  treas- 
urer     99 

For  filing  proceedings  in  liquidation 136b 

For  investigating  bonds  for  certification 61a 

For  services  rendered  trust  department  of  national  bank 48a 

For  special  examination 124 

[232] 


INDEX  

BANK  ACT  OF  CALIFORNIA — Continued 

FEE— Continued.                                                                                                                              .     .  Section 
Payable  by   railroad,   steamship   or  express  company   transmitting  money 

to   foreign   countries '^ 

Fines,   recovery  of  and   compromise '^^ 

First  Lien,  on  property  situated  in  another  state 5  7a 

On  real  estate,   effect  of  certain  assessments 57 

See  Lien. 

Foreign   Banking,   branch   office   for 5o 

Investment    in   bank    transacting 58 

Regulations  5o 

Foreign  Banking  Corporations,  acceptances  of  deposits  in  California  prohibited  7 

Agency  in  this  state  subject  to  examination 124 

Assignment  of  capital  to  local  business 7 

Banking   functions  limited   

Certificate    of   superintendent    necessary    to    transaction    of    business    per- 
mitted    7 

Loans  based  on  entire  capital,   v^rhen 7 

Local  business  kept  separate  from  general  business 7 

May  loan  money  in  California 7,  12c 

Not  prohibited  from  loaning  on  real  estate  in  this  state 7 

Not  prohibited  from  loaning  through  local  correspondents 7 

Not  to  transact  trust  business  in  California 7 

Power  of  attorney  to  superintendent  of  banks , 7 

Representative   may   maintain   office i2c 

Service  of  process   on 7 

Those  having  power  to  accept  deposits  not  affected 7 

Foreign  Branch,   capital   required 58 

Established,    how    58 

Examination  of 58 

Foreign   Corporation  not  transacting  banking  in   this   state   may   buy   and   sell 

bonds    12c 

Foreign  Countries,  bonds  of  investment  in  by  savings  bank 61 

Transmission  of  money  to 13 

Foreign  Government  Bonds,  savings  bank  may  invest  if  certified 61 

Foreign  Life  Insurance  Company  transacting  business  in  this  state 12,  13 

Foreign  Trust  Company,  may  act  as  executor  or  trustee  under  will 7 

Powers    permitted    7,  90 

Qualification  as  executor  or  trustee 7 

Forfeitures,   unlawfully  opening  branch  office 9 

Recovery  and  compromise — 

Funds,    of   commercial   bank   deposited   with    other    commercial    bank    may    be 

limited 85 

Paid  into  county  treasury  by  receiver,  when 137 

Paid  out  on  court  order 137 

[233] 


BLYTH,  WITTER  &  CO. 


BANK  ACT  OF   CALIFORNIA — Continued 

FUNDS— Continued.  ^^':*i|'° 

State   banking   fund    

When  escheated  to  state,  invested,  how '37 

Furniture  and  Fixtures,   commercial  bank  investment "4 

For  offices  of  state  banking  department '22 

Savings  bank  investment  "* 

Trust  company  investment  governed  by  savings  bank  law 105 

Government  Bonds,  eligible  for  deposit  by  trust  company  with  treasurer 96 

Legal   for   savings  banks   "* 

Government  Lien,   effect  as  first  lien 57,  57a 

Governor,  annual  report  of  superintendent  of  banks  to  be  made  to 140 

Superintendent  of  banks  appointed  by 120 

Guarantor,   deemed  to  be  borrower "" 

Guardian,  deposits  of  money  with  trust  company 91 

Deposits  of  personal  property  with  trust  company 93 

CI 

Deposits  with  banks 

Guardian  of  Estates,  trust  company  may  act  as;  oath  required 90 

Hypothecation  of  assets  for  borrowed  money 21a 

Of  stock  by  director,  must  notify  superintendent  and  may  be  removed....  10 

Impairment  of  capital  stock '33,  136 

Incorporation,  see  Articles  of  Incorporation. 

Injunction,    restraining  action   of  superintendent 134,  136 

Restraining  use  of  unauthorized  words  or  terms 12 

Insolvency,  bank  deemed  insolvent  when  fails  to  restore  reserves 20 

Duties   of   superintendent '3o 

Inspection,  see  Examination. 

Insurance,  commercial  bank  acting  as  agent J 

Commercial   bank   not  to    guarantee  premium 5 

Premium  not  to  be  guaranteed  by  commercial  bank  as  agent 5 

Interest,  payable  by  trust  company  on  deposits 95 

Past  due  one  year,  debt  considered  bad 21b 

Trust  company  may  receive  on  securities,  deposited  with  treasurer 96 

Unpaid   not  to   be  included   in    calculating   profits 45 

International  Banking,   investment  in 58 

Inventory  of  claims  against  banks  in  liquidation 136 

Investigation  of  bonds  submitted  for  certification 61a 

Investment  Certificates,  building  and  loan  associations  m^y  issue 12,  12a 

Investments,  bank  shall  not  invest  in  own  stock 34 

Bond,    by    savings    banks "^ 

By   commercial  bank  in  bonds  limited 36,  46 

By  commercial  bank  in  premises,   furniture  and  vaults 84 

By  savings  bank  61,  67 

By  savings  bank  after  July  1,   1909,  status  of 61,66 

By  savings  bank  in  premises,  furniture  and  vaults 61 

[234] 


INDEX __=___ 

BANK  ACT  OF  CALIFORNIA — Continued 

INVESTMENT&— Continued.  ^®'^i*xc 

Charged  to  conform  to  act,   how *^^ 

In  acceptances   of  "Edge  Act"   corporations 61 

In  collateral  trust  bonds — by  savings  banks 61 

In    corporate    stock    prohibited,    exception 37 

In  stock  of  trust  company  in  same  county  permitted 37 

In   stock   of  bank   transacting   international   banking 58 

In  stock  of  safe  deposit  company  in  same  city  permitted 3  1 

Of  each  department  to  be  kept  separately  26 

Of  trust  company  governed  by  savings  bank  limitations 103 

Real  property  by  savings  banks 61 

"Investment  Companies  Act,"  acceptances  of  corporation  formed  under 61 

Irrigation  Assessments,   effect  as  first  lien 57,  57a 

Irrigation    District,    bonds   when    eligible    for    deposit    by    trust    company    with 

treasurer     •'" 

Bonds  when  legal  for  savings  banks 61 

Joint    Deposits    '  ^^ 

Judgment  dissolving  bank,  superintendent  of  banks  may  procure 135a 

Jurisdiction  in  actions  brought  under  bank  act I3Da 

Legal  Investments,  savings  banks 61 

Letters  of  Credit,  investment  of  commercial  bank 80 

Liability,    deposit    ' 

For  making  false  statement  or  entry 38 

Of  directors,  officers  or  employees  for  fraud  or  omission  of  duty 38 

Of  stockholders,  cannot  be  waived 40 

Incurred  by  purchasing  bank 3  I 

Total  of  one  borrower,  how  computed 80 

Liberty  Bonds,  savings  bank  may  receive  as  bailee 70 

License,  branch   office;   fee " 

Discretionary    with    superintendent 9,   1 2c,  127 

Fee  for  certificate  to   transact  banking  business 24 

Foreign  branch    -'8 

Surrendered  upon   conversion  into   national   bank 5oa 

To  representative  of  foreign  corporation 12c 

To  transact  banking  business "27 

To   trust  companies   "27 

Lien,  commercial  bank  loan  on  realty  must  be  first  lien;  exception 47 

Savings  bank  loan  on  realty  must  be  first  lien;  exception 67 

Governmental,   effect  of  57,  57a 

Limitation  of  period  for  action  against  selling  bank 31 

On   deposit   liability   19 

On  deposit  of  savings  banks  in  any  one  bank 68 

On    holding    real    estate 54 

[235] 


BLYTH,  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

Section 

Limitations  on  acquiring  stock  in  safe  deposit  company  or  trust  company 37 

On  borrowed  money,  commercial 21a 

On  borrowed  money,  savings 68 

On  commercial  bank  loans 47,  80 

On  deposit  of  banks  in  a  savings  bank 68 

On  investment  in  premises,   etc.,   commercial 84 

On  investment  in  premises,  etc.,  savings 61 

On  investment  in  safe  deposit  department 30 

On  loans  secured  by  corporate  stock 44,  67 

On  loan  secured  by  property  situate  in  another  state 57a 

On  real  estate  loans  by  commercial  bank 47 

On   savings  bank   loans 66,  67 

Other   real  estate  held   five  years 54 

Limit,   on   trust   companies*   loans 105 

Liquidation,  banks  in,   claims  against 136 

Banks  in,  names  to  be  posted 141 

Compensation  of  counsel  in '36 

Costs   in   '  36 

Filing   of  proceedings   in 136b 

Of  banks  by  superintendent   of  banks 136 

Proceedings,    notice   to   banks 136 

Superintendent  of  banks  may  take  possession  of  property I  36a 

Voluntary  I  36a,  137 

When   corporate   existence   expires 136a 

Loans,   bank   stock  as   security 44 

Bank  shall  not  loan  on  its  stock -  34 

By  banks  to  affiliated  banks 65,  83 

By  commercial  banks  on  United  States  Government  securities 80,  83 

By  commercial  banks,  to  directors,  agents  and  employees 83 

By  commercial  bank  to  officers  prohibited 83 

By  commercial  bank  prohibited  when  reserves  deficient 20 

By  commercial  bank  on  real  estate 47 

By  commercial  bank  secured  and  unsecured  limits 80 

By  commercial  bank  to  corporations  if  officers  or  directors  interested 83 

By  foreign  corporations  7 

By  savings  bank  to  corporations  if  officers  or  directors  interested 65 

By  savings  bank  to  officers  or  directors  prohibited 65 

By  savings  bank  to  director  not  an  officer  on  U.  S.  security  permitted....  65 

By  savings  banks  prohibited,  when  reserves  deficient 68 

By  savings  banks,   renewal  of 66 

By  savings  banks  on  bonds 67 

By  savings  bank  on  assigned  mortgage 67 

By  savings  bank  on  real  estate 67 

[236] 


INDEX ___^=_^=.=_ 

BANK  ACT  OF  CALIFORNIA— Continued 

LOANS-Continued.  Section 

By  savings  bank  on  corporate  stock "' 

Commercial  bank   limitations 46,  47,  80,  81,  83 

Limitations  when  underlying  property   encumbered  by   governmental 

liens    5  7,  5  7a 

Not  to  be  made  by  savings  bank  if  depositors*  demands  unpaid 64 

On  corporation  or  bank  stock,  limited 44,  o7 

On  first  lien  on  real  estate,   effect  of  certain  assessmicnts 57,  57a 

On  mining  stock  by  savings  bank  prohibited 67 

Permitted  in  savings  bank,  may  be  made  by  commercial  bank 80 

Prohibited,   must   be   reported 65,  83 

Real   estate  47,  57.  57a,  67 

Restrictions  on  loans  to  corporation  by  savings  bank  if  officers  or  direc- 
tors  interested    "-* 

Savings  bank   limitations 57,  66,  67 

To  officers  prohibited  in  commercial  bank 83 

To  officers  or  directors  prohibited  in  savings  banks 65 

To  agent  or  employee,  not  officer  or  director  by  savings  bank  permitted         65 

To  clubs,  religious  or  membership  corporations,  application  of  law 65,  83 

To  members  of  advisory  board  not  officer  by  commercial  bank  permitted         83 
Trust  company,  how  governed '05,  106 

Location,   change  of  principal  place  of  business o 

See  Sec.  321a,  Civil  Code. 

Effect  on  capital  requirements,  commercial  bank 82 

Effect  on  capital  requirements,   departmental  bank 23 

Effect  on  capital  requirements,  savings  banks 60 

Effect  on  capital  requirements,  trust  company 90 

Governing  capacity  of  commercial  bank  as  insurance  agent 5 

Of  branch  office " 

Losses,  may  be  charged  to  surplus,   when 21 

May  not  be  charged  to  surplus  invested  in  premises  or  fixtures,  etc 2  1 

Reserve  fund  may  be  charged  with 64 

Manager  of  foreign  bank,   oath   required 1  I 

Market  Value,  bonds  and  stocks  are  collateral  on  basis  of 67 

Oil,  mineral,  timber  land 61 

Redwood  timber  land  61 

Meeting  of  directors  once  a  month I  ' 

Of  members  of  mutual  bank  to  capitalize 29 

Of  stockholders,  consolidation  3  la 

Of  stockholders,  merger 313 

Of  stockholders,  purchase  and  sale 3  1 

Of  stockholders,  superintendent  of  banks  may  call 135 

Member,   director  of  bank  without  capital  stock  must  be 10 

[237] 


BLYTH,  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

Section 

Members  of  bank  may  make  application  to  dissolve 137 

Of  mutual  bank  may  elect  to  capitalize 29 

Membership  Corporations,  loans  to,  exemptions  in  favor  of 65,  83 

Shares  may  be  issued  by  building  and  loan  association 12,  1  2a 

Merger  of  Banks,   agreem,ent   filed,   where 31b 

Agreement  to  be  approved  by  superintendent 31b 

Corporate  existence  of  merging  banks,  effect  on 3  I 

Effect   on   pending   legal   actions 3  lb 

Procedure  3  1  b 

Stockholder  dissenting,  rights  and  liabilities 3  1 

Stockholders  must   ratify   3  lb 

Mineral  Land,  fixing  market  value  of 61 

Mining  Stock,  prohibited  as  collateral  or  investment  for  savings  bank 67 

Minor,   deposit  by   or  in  name  of '  ^^ 

Trust  company   may  be   guardian   of  estate "" 

Trust  company  ineligible  as  guardian   of  person 90 

Mint  Certificates,  may  be  purchased  by  savings  bank 61 

Mortgage,  assigned  mortgage  as  security,  margin  necessary 67 

Loan   on  - 47.  57.  57a.  67 

Sale  to  bank  by  director,  officer,  employee  or  controlling  stockholder....         35 

Trust    company    may    mortgage   premises    to    treasurer   as    trust    security, 

u  97 

when     " 

When  eligible  for  deposit  by  trust  company  with  treasurer 96 

Mortgage  Insurance,  guaranteeing  notes,  legality  for  savings  banks 61 

Policy    to    accompany    participation    certificates    deposited    by    trust    com- 
pany with  treasurer  "y 

Policy,  when  eligible  for  deposit  by  trust  company  with  treasurer 96 

Mortgage  Participation  Certificates,  investment  by  savings  banks 61 

When  eligible  for  deposit  by  trust  company  with  treasurer 96 

Municipal  assessment,  effect  of,   on  first  lien 57,  5  7a 

Municipal  Deposits,  in  savings  banks 62 

Reserve  against,  not  required 20,  68 

When  secured,  bank  not  required  to  maintain  capital  against 19 

See  Municipal  Deposit  Act,  Appendix. 
Mutual  Bank,  may  capitalize 29 

Regulations     ^"'  "^ 

Reserve    fund    "^ 

Name,    restrictions   on   use '2,   1 2a,  12b,  12c,  12/ 

Change  of,  see  Sec.   1278,  Code  of  Civil  Procedure. 
National  Banks,   conversion  into  state  bank 5ob 

Conversion   of  state   bank   into 5oa 

Depositaries  for  state  bank ^8 

Examination  of  as  depositary 48 

[238] 


INDEX 

BANK  ACT  OF  CALIFORNIA — Continued 

NATIONAL  BANK— Continued.  Section 

Examination  of  trust  department 4oa 

Fiduciary   capacity   ^"* 


May  act  as  trust  company 


48^ 


May  incorporate  as  state  banks 56b 

Operating  as  trust  companies ^"^ 

State  bank  may  become  national  bank '.  56a 

Trust  department;  must  deposit  securities  with  treasurer 48a 

Trust  department  subject  to  examination  by  superintendent 48a 

Trust   functions   of   ^"^ 

With  fiduciary  powers  may  use  word  "trust" 48a 

Newspaper,  publication  of  purchase  and  sale  notice      3  1 

Notice,  of  assessment  on  stock '^3 

Of  claims  against  bank '36 

Of  consolidation  ^  '^ 

Of  conversion  of  savings  bank  into  national  bank,   how  given 56a 

Of  pendency  of  action  against  stockholder  in  re  liquidation 136 

Of  sale  of  banking  business  to  be  published 3  I 

Of  unclaimed  deposits  '  5 

Of  withdrawal  may  be  required  by  savings  bank 64 

Posted  in  bank  as  to  names  and  holdings  of  directors 1  7 

To  present  claims  in  liquidation 136 

To  savings   depositors  of   conversion 56a 

Oath,  chief  deputy  superintendent  must  subscribe  and  file 121 

Director  must  subscribe  and  file  with  superintendent 1  I 

Examiner  must  subscribe  125 

Manager  or  agent  of  foreign  bank  doing  business  in  this  state  must  sub- 
scribe  and   file '  ' 

May  be  administered  by  superintendent,  chief  deputy  or  examiners 124 

Of  superintendent;  time  limit  on  filing 120 

Refusal  of  officer  to  be  sworn;  result 135a,   136 

Officers,    commission   to,   prohibited 39 

Liability  for  fraud  or  omission  of  duty 38 

Of  commercial  bank  may  not  borrow 83 

Of  com,mercial  bank  shall  not  be  endorsers 83 

Of  commercial  bank  interested  in  corporation  borrowing 83 

Of  savings  bank  interested  in  corporation  borrowing 65 

Of  savings  bank  may  not  borrow 65 

Of  savings  bank  shall  not  be  endorsers 65 

Overdraft   prohibited    39 

Prohibited  loans  to  must  be  reported 65,  83 

Of  trust  company  entitled  to  knowledge  of  private  trusts 1  03 

Purchasing  assets  or  obligations  of  bank 41,  42 

[239] 


BLYTH.  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

OFFICERS— Continued.  ^^f  ^"T 

Refusal  to  be  examined  on  oath;  result \iOa,  130 

Selling  note,  bond  or  contract  to  bank >5 

Of  state  banking  department  in  San  Francisco  and  Los  Angeles 122 

Official  Reports  of  superintendent  of  banks,  prima  facie  evidence 142 

See  Called  Reports;  examination. 

Oil  Land,  fixing  market  value  of 61 

Order,  refusal  of  bank  to  observe '36 

To  shov^r  cause,  issued  by  superintendent  of  banks 134 

Organization  of  bank,  examination  of  documents 127 

Of  bank 127,128 

Overdraft  of  ninety  days  not  an  asset 21b 

Prohibited  to  officer,  director,  agent,  teller,  clerk,  employee  of  bank 39 

Partial  Payments  on   certificate  of  deposit  prohibited 21b 

Participation  Certificates,  mortgage,  legality  of,  for  savings  bank 61 

Mortgage,  when  eligible  for  deposit  by  trust  company  with  treasurer 96 

Par  Value  of  capital  stock  one  hundred  dollars;   exception 53 

Payment,  bank  suspending  cause  for  dissolution I  35a,  136 

Of  expenses  of  banking  department '23 

Savings  bank  may  demand  notice  on  deposits 64 

Savings  bank  may  pay  depositors  by  draft 62 

Penalty,  for  failure  to  maintain  reserves 20 

For  prohibited  loans,   commercial  bank "3 

For  prohibited  loans,   savings  bank 65 

For  unauthorized  banking  or  use  of  certain  terms 12 

Recovered  or  compromised  '^^ 

To  be  paid  into  state  banking  fund 144 

Unauthorized  advertising  of  bonds 61a 

Unauthorized   conduct  of  branch  office 9 

Violation  of  bank   act '»  '^^ 

Personal  Property   collateral   for  commercial  bank 80 

Collateral  for  savings  banks 67 

Petition,  see  Application. 

Place  of  Business,  see  Location. 

Pledge,   directors  may  not  pledge   qualifying  stock 10 

Population,  governing  capacity  of  commercial  bank  as  insurance  agent 5 

Governing  capacity  of  commercial  bank   as  broker 5 

Governs  capital  requirements  of  bank 23,  60,  82 

Governs  capital  requirements  of  trust  company  or  trust  department 90 

Relation  to  capital  of  commercial  bank 82 

Relation  to  capital  of  departmental  banks 23 

Relation  to  capital  of  savings  bank 60 

Governing  ratio  of  reserve  required  of  commercial  bank 20 

See  Location. 

[240] 


INDEX 

BANK  ACT  OF  CALIFORNIA— Continued 

Section 

Postal  Savings,   commercial  banks  may  borrow 21a 

Deposited  in  savings  banks  62 

Deposits,   reserve  against  not  required 50,  68 

Deposits  when  secured,  banks  not  required  to  maintain  capital  against 19 

Savings   bank   nxay   borrow 62 

Powers,  building  and  loan  associations,   restrictions  on 12,  12a 

Commercial    bank    5 

Foreign  corporations  7,  90 

Savings    banks    4 

Trust    companies 6,  90 

Preference,  depositors  have  priority  over  stockholders 2  I 

Deposits  by  order  of  court  are  preferred  claims 5  I 

To   any   depositor  or   creditor  prohibited 2  1 

Preferred  Claims,  deposits  by  order  of  court  are 5  I 

Preferred  Creditors,  bank  shall  not  have  except  as  authorized  by  act 21a 

Preferred  Stock,  bank  not  to  issue 53 

President,  returning  and  publishing  statement  of  unclaimed  deposits I  5 

Verification  of  called  and  special  reports 130,  130a 

See  Officers. 
Principal  Office,  see  Location  and  Bank  Prerriises. 

Private  Trusts,    confidential    nature   of 103 

Defined  I  0  1 

May  be  designated  as  court  trust;  result 101 

Not  subject  to  supervision  of  superintendent  unless   designated  court 

trust,  except  101 

Officers  entitled  to  knowledge  of 103 

Secured   separately   by   deposit  with  treasurer 96 

Trustee  shall  not  disclose,   what 103 

When  subject  to  supervision 101 

Proceedings,  in  dissolution  of  bank 136,  137 

In   liquidation,    filing    of 136a 

Consolidation   of   banks 3  la 

Merger   of   banks   31b 

Purchase  and   sale   of  banks 3  1 

To    enjoin   superintendent    of   banks 134,  136 

When  capital  of  bank  is  impaired 133 

Process,  service  on  foreign  corporations  transacting  business  in  this  state 7 

Profit  and  Loss,  certain  debts  must  be  charged  to 21b 

Profits,  uncollected  interest  not  to  be  included 45 

Public,  bank  shall  post  names  and  holdings  of  directors 1  7 

Records  of  state  banking  department  not  public 142 

Superintendent  to   post  bulletin  of  information 141 

Public  Administrator,  deposits  with  any  bank 5  1 

[241] 


BLYTH,  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

PUBLIC   ADMINISTRATOR— Continued.  Section 

Deposits   with   trust   company 92 

May  leave  deposits  of  deceased  with  savings  bank 68!/2 

Public  Deposits,   excluded   in   calculating   reserves 20,  68 

Governed  by  Public  Deposits  Acts,  Appendix. 

Public  Moneys,  commercial  banks  may  borrow 21a 

Deposited  in  savings  banks o2 

Public  Utilities  Act,  effect  on  loans  and  investments  by  savings  banks 61 

Public  Utility  Bonds,  when  legal  for  savings  banks 61 

Publication,   by  building  and   loan   association 12,  12a 

Depositors,  list  of  unknown  and  deceased 1  5 

Of  false  statement,   penalty   for 38 

Of  notice  of  claims  against  bank 136 

Of  notice  of  consolidation 3  1a 

Of  notice  of  conversion  savings  bank  into  national  bank 56a 

Of  notice  intention  mutual  bank  to  capitalize 29 

Of  notice  of  purchase  and  sale 3  1 

Of  notice  of  sale  of  stock  for  assessment 133 

Of  notice  of  sale  by  court  of  real  estate  held  by  bank 54 

Of  notice  of  sale  of  business 3  1 

Of  resources  and  liabilities  with  those  of  other  bank  prohibited 1  4 

Of  statement  of  condition  coincides  with  called  report 132 

Of  summons  in  escheat  proceedings 15 

Of  surplus  must  be  separate  from  undivided  profits 14 

Unclaimed    deposits   '  5 

See  Advertising. 

Purchase  by  bank  of  another,  procedure 3  1 

By  bank  of  contract  note  or  bond  in  which  officer,  director  or  stockholder 

interested   ^^ 

By  officer,  director,  agent  or  employee  of  bank's  assets  or  obligations 41,  42 

Of  business  of  bank  or  department 3  I 

Purposes,  see  Powers. 

Railroads,  equipment  trust  certificates  of 61 

Railroad  Bonds,  when  legal  for  savings  banks 61 

When  may  be  acquired  for  debt  by  savings  bank 61 

Acquired  for  debt  must  be  sold,  when 61 

Railroad  Company  transmitting  money  to  foreign  countries 13 

Ratio,   capital  and  surplus  to   deposit   liabilities '" 

Reserves   to   deposits,    savings 6o 

Reserves  to  deposits,   commercial 20 

Real  Estate,  effect  of  certain  governmental  liens 57,  5  7a 

Loans  on,  by  commercial  bank ^' 

Loans  on,  by  savings  bank ^' 

May  be  held  five  years 54 

[242] 


INDEX 

BANK  ACT  OF  CALIFORNIA — Continued 

REAL  ESTATE— Continued.  Section 

Oil,  mineral  or  timber  land,  market  value  of 61 

Redwood  timber  land  as  security  for  savings  banks 61 

Sale  by  court  if  held  five  years 54 

Real  Estate  Bonds,  when  legal  for  savings  banks 61 

Reapportionment  of  capital  and  surplus,   permission  of  superintendent 23 

Receiver,  deposits  of  money  with  trust  company 91 

Deposits  of  personal  property  with  trust  company 93 

Deposits   with    banks    5  1 

Examiner  shall   not  act  as,   when 125 

Funds  of,  held  in  county  treasury,  when 137 

Funds  of,  escheat  to  state,  when  137 

Trust  company  may  act  as;  oath  required 90 

Reclamation  District,  assessed  by,  effect  as  first  lien 5  7,  57a 

Records  of  banking  department  not  open   to   inspection 142 

Of  banking  department  not  public  docum.ents 142 

Rediscounts  with  federal  reserve  not  borrowed  money 21a,  62 

Redwood  Timber  Land,  security  for  savings  banks 61 

Release,  payment  of  joint  deposit 15a 

Religious  Corporation,  loans  to,  exemptions  in  favor  of 65,  83 

Report,  annual,  of  superintendent  of  banks  to  governor 140 

By  savings  bank  of  money  borrowed  to  purchase  United  States  securities         62 

Loans  to  members  of  advisory  board 83 

Loans  to  directors  and  employees  of  commercial  bank 83 

Loans  to  agents  or  employees  of  savings  bank 65 

Loans  to  corporations  in  which  officers  or  directors  are  interested 65,  83 

Of  loans  to  copartnerships  in  which   directors,   agents   or   employees  are 

interested    83 

Of  loans  to  corporations  in  which  officers,  directors  or  employees  are  in- 
terested     65,  83 

Of  examination  by  directors 139 

Prohibited  loans  must  be  reported  if  made 65,  83 

Of  unclaimed  deposits  1  5 

Official,  of  superintendent  of  banks,  prima  facie  evidence 142 

Special,   to  superintendent  of  banks 130a 

Trust  comipany  must   report,   what 101 

See  Called  Report. 

Reports  of   Condition,    of  bank 129,  130,   130a,  131,  132 

Of  department  1  29 

Of  foreign  corporations 130 

Penalty  for  failure  to  make 138 

Publication    of    1 32 

[243] 


BLYTH,  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

REPOKTS    OF    CONDITION    OF    BANK— Continued.  Section 

Special    130a 

What  to  contain 130 

When  called  131 

Resegregation  of  capital  or  surplus 23 

Reserves,   commercial   bank   required 20 

Deficient,   effect  on  loans 68,  20 

Depositaries  nominated  and   designated 20 

Depositaries,  what  bank  eligible 20 

Deposits  of  savings  bank  with  a  savings  bank  not  part  of  reserves  of  de- 
positing bank  68 

Effect  if  commercial  bank  enters  federal  reserve 20 

Effect  if  savings  bank  enters  federal  reserve 68 

May  be  deposited  in  federal  reserve  bank 20,  68 

Of  each  department  to  be   separately   maintained 25 

Penalty  for  failure  to  maintain 20 

Population  governs  reserves  of  commercial   bank 20 

Public  deposits  excluded  in   calculating 20,  68 

Reserves  on  deposit  defined 20 

Reserve  depositary  defined  20 

Savings  bank  required  68 

Total   reserves  defined  20 

Trust  funds  not  to  be  carried  as 32 

Reserve   Depositary   20,  43,  68 

See  Reserves  and  Depositary. 

Reserve  Fund  of  mutual  bank 60,  64 

Resources,  advertising  to  be  separate  from  those  of  other  bank 14 

Revolving  Fund,  superintendent  of  banks  may  retain 123 

Safe  Deposit  Company,  bank  may  acquire  stock  of  one 37 

Safe  Deposit  Department,  investment  in  limited 30 

Bank  may  conduct  30 

Safe  Deposit  Vaults,  investment  in  by  commercial  banks 84 

Investment  in  by  savings  banks 61 

Safe  Keeping,  savings  banks  may  receive  United  States  bonds  for 70 

Salary  of  employees  of  state  banking  department 121 

Of  superintendent  of  banks 120 

Sale  of  Banking  Business,  procedure 3  I 

Depositors'  right  to  withdraw 3  1 

Does  not  impair  creditors*  rights 3  1 

Sale  of  real  estate  held  five  years 54 

By  bank  of  assets  or  obligations  to  officer,  directors,  agents  or  em|ployees..4  1 ,  42 
By  officer,  director,  agent  or  controlling  stockholder  of  contract,  note  or 

bond  to  bank  35 

[244] 


INDEX 

BANK  ACT  OF  CALIFORNIA — Continued 

Section 

Savings,  commercial  bank  prohibited  from  advertising  for  or  soliciting 49 

Of  school  children  " 

Restriction  on  advertising '2.  I2a,  49 

Savings  Banks,  acceptances  of  "Edge  Act"  corporations 61 

Acceptances  that  are  legaJ 61,  67 

Advertising,  hov/  regulated  2" 

Agents  of,   loans  to "^ 

Amortization  of  bonds  by 61 

Amount  of  deposits  of  which  may  be  kept  with  one  bank 68 

Assigned  mortgage  as  security "' 

Bailee   for   keeping   liberty   bonds '0 

Bankers'  acceptances  that  may  be  discounted  or  purchased., 67 

Bonds  legal  for  investment 61 

Borrowed   money   "^ 

By-laws  must  prescribe  rules  for  savings  deposits 64 

Capital,  ratio  to  deposit  liability '9 

Capital  of,  relation  to  loans  to  one  person  or  firm 66 

Capital  with  reference  to  population 60 

Certificate  of  deposit  may  be  issued  by 63 

Contracts  with  depositors  64 

Commercial  bank  may  not  act  or  advertise  as 49 

Commercial  paper,   investment   in 67 

Conversion  into  national  bank;  necessary  notice 56a 

Corporation  loans,   directors  or   officers  interested 65 

Dealing  in  real  or  personal  property 62 

Defined 4 

Depositary  for  keeping  liberty  bonds 70 

Depositors  entitled   to   notice   of  conversion   into   national  bank 56a 

Deposition  may  be  paid  by  draft 62 

Deposits  of  decedent  68'/2 

Deposits  of   other  banks 6o 

Deposits  with  other  banks 68 

Director  may  not  borrow 65 

Discounting   or  purchasing   bills   by 67 

Employees  or  agents  may  borrow   funds 65 

Foreign  government  bonds  may  be  certified 61 

Furniture  and  fixtures,  investment  in 61 

Gold  and  silver  bullion,  investment  in  by 61 

Government  bonds  legal 61 

Investments  lawfully  made  after  July    1,    1909,  to 66 

Investments  permitted   61 

Investment  in  bank  premises 61 

Investments  in  mining  stock 67 

[245] 


BLYTH.  WITTER  &   CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

SAVINGS  BANKS — Continued.  Section 

Loan  may  not  be  made  while  reserves  deficient 68 

Loaning   capacity   limited oo.  67 

Loans  on  bonds  and  stocks,   limitations 67 

Loans   on   real  property .-  67 

Loans  to  affiliated  bank 65 

Loans  to  directors  and  officers  prohibited 65 

Loans  to  directors,  agents,  or  employees  on  United  States  securities  per- 
mitted without   report 65 

Loan  to  one  borrower  restricted 66 

Maturity,   ten  years  longest  permitted 67 

May  borrow  money,  to  purchase  United  States  securities 62 

May  borrow  postal  savings 62 

May  borrow  public  money 62 

May  receive  United  States  bonds  on  deposit  as  bailee 70 

May  rediscount  with  federal  reserve  bank,  what 62 

May  not  receive  deposit,  of  commercial  bank 68 

Mining  stock,  loan  on  or  investment  in  prohibited 

Must  conform  to  bank  act 69 

Must  use  the  word   "savings" 28 

Mutual  reserve  fund  of,  must  be  increased  when 64 

Mutual   reserve  fund,   required 60 

Not  to  make  loans  if  depositors'  demands  unpaid 64 

Notes  legal  for  investment 61 

Notice   of  withdrawal   of  deposits 64 

Officer  may   not  borrow 65 

Participating  interest  in  certain  bills  may  be  acquired 67 

Personal  property  held  by 61 

Premises,  investment  in  61 

Prohibited  loan  must  be  reported  if  made 65 

Purchase   of  bankers*   acceptances 67 

Purposes   of  4 

Ratio  of  capital  and  surplus  to  deposits 19 

Real   property   held 61 

Real  estate  loan  to  be  first  lien 67 

Receiving  deposits  of  public   moneys 62 

Rediscounting  with  federal   reserve  bank 62 

Relation  to   capital  of  loans  of 67 

Renewal  of  loans  66 

Repayment  of  depositors  set  by  by-laws 64 

Reserves  may  be  on  call  with  federal  reserve  bank 68 

Reserves    required    68 

Rules  for  savings  deposits  in  by-laws 64 

Safe  deposit  vaults,   investment  in 61 

[246] 


• INDEX 

BANK  ACT  OF  CALIFORNIA — Continued 

SAVINGS  BANKS— Continued.  Section 

Security   eligible   for  loans "' 

Security,  margin  necessary o' 

Selling  real  estate  may  take  subordinate  lien 67 

Shall  not  contract  debt,   except 62 

Without  capital  stock  reserve  fund  must  equal,  what 19 

Total  acceptances  and  bills  that  may  be  held 67 

Use  of  term  restricted '^>    1  ^a.  4" 

Without  capital  stock,  relation  of  reserve  fund  to  deposits 19 

Savings  Department,  see  Savings  Banks. 

Savings  Deposits,  advertising  for,   prohibited  when 12,  12a 

Soliciting  by   others  prohibited '2,  12a 

Soliciting  by   commercial  bank  prohibited 49 

School  District,  assessment  by,  effect  as  first  lien 57,  57a 

Bonds  of,  available  for  deposit  by  trust  company 96 

School  Savings,  consent  of  superintendent  necessary  to  accept 9 

Persons  collecting  deemed  agent  of  bank 9 

Regulations   concerning  9 

Seal  of  Superintendent  of  Banks,  when  affixed,   charge  for 24a 

Secretary  of  State  must  issue  certificate  regarding  consolidation 31a 

Shall  certify  documents  when " 

Securities,  additional  deposit  of,  by  trust  company  with  treasurer 98 

Advertisement  of  limited,  when 61 

Certified,  official  list  to  be  kept 61a 

Cost  of  investigation  of 61a 

Deposited  by  trust  company,  with  treasurer 96,  97,  98,  99 

Segregation  of  capital  and  surplus,   permission   for 23 

Signs  of  banks  must  show  what 28 

Of  branch  offices  must  show  what 28 

Special  deputy  superintendent  of  banks 136 

Special  Report  of  banks,  superintendent  of  banks  may  require I  30a 

State,  assessment  by,  effect  as  first  lien 57,  57a 

Responsible  for  securities  deposited  by  trust  company 16 

State  of  California,  bonds  legal  for  savings  banks 61 

Governmental  subdivisions,  bonds  legal  for  savings  banks 61 

State  deposits,  see  Public  Deposit  Acts,  Appendix. 

State  Banking   Department,   assistants 121 

Attorney    '  2  1 

Banks   must   report   to '30 

Bulletin  to  be  filed  as  public  document 141 

Chief  deputy,  failure  to  report  insolvent  condition 126 

Chief  deputy,   qualification  of 121 

Created 120 

Examiner,  failure  to   report  insolvent  condition 126 

[247] 


BLYTH.  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA— Continued 

STATE  BANKING  DEPARTMENT— Continued.  Section 

Examiner  of,   must  file   oath 125 

Examiner  of,  shall  not  act  as  receiver  when 125 

Examiners     1  2  i 

Fund    of    \  23 

Information  to  be  posted  in  office 141 

Offices  in  San  Francisco  and  Los  Angeles 122 

Officials  of,  cannot  borro'w  from  state  banks 121 

Records    of    non-public    documents 142 

Revolving  fund  of 123 

Special   report  to  130a 

State  Banking  Fund,   amount  of 123 

Banks  shall  be  assessed  for 123 

Creation    of    123 

Elxpenses  chargeable  to 1  23 

Method  of  assessing  banks 123 

How  maintained     1 23 

Salaries  paid  out  of 123 

Sums  recovered  paid  into 144 

State  Treasurer,  deposit  with,  by  trust  company 90 

Deposit  with,  by  trust  department  of  national  bank 48a 

Exchange  of  securities  deposited  with 96 

Return  of  trust  company  securities  by 98,  102 

Stationery  must  indicate  type  of  business  conducted 28 

Statute  of  Limitations  on  sale  of  bank  or  department 3  1 

Steamship  Company  transmitting  money  to  foreign  countries 13 

Stock,  assessment  on,  when  levied 133 

As   collateral,    limited 44,  67 

Bank  prohibited  from   purchasing,   exceptions 37 

Director  must  hold   qualifying   stock   in   bank 10 

Investment  by  bank  in  own  stock 34 

Preferred,    prohibited,    except   53 

Sale  of  as  incident  to  merger 31b 

Sale  of  on  failure  to  pay  assessment 133 

Subscription  lists   1 2  7 

Transfer  of  directors'  holdings,  notice  of I  7 

See  Capital  Stock. 

Stockholders,   action  against 1  36 

Character    of    1 28 

Consent  to   consolidation  31a 

Consent  to  merger  31b 

Consent  to  purchase  and  sale 3  1 

Consolidation   rights  and  liabilities 31a 

Controlling  sale  of  note,  bond  or  contract  to  bank 35 


[248] 


INDEX __^ 

BANK  ACT  OF  CALIFORNIA — Continued 

STOCKHOLDERS— Continued.  ^^\*'l°U 

Dissent  in  writing  to  merger ^'" 

Fitness  of,  investigation  '^" 

Liability  of  cannot  be  waived 40 

May  elect  receivers,   when '^^ 

May  make  application  to  dissolve '3' 

Meeting  of,  may  be  called  by  superintendent  of  banks 135 

Merger;  rights  and  liabilities 31b 

Must  be  notified  of  assessment '33 

Refusal  to  pay  assessment '33 

Sale  of  business,  rights  and  liabilities 3  1 

Subscription,  circulation  of  lists  to  be  approved  by  superintendent 127 

Superintendent  of  Banks,  action  by,  to  procure  judgment  of  dissolution 135a 

Affidavit  of  publication  of  sale  and  purchase,  filing  with 3  1 

Annual  report  to   governor  '40 

Appointment  of  '  ^" 

Approval  for  opening  branch  offices 9 

Approval  of  agreement  of  consolidation 3  la 

Approval  of  merger  agreement 31b 

Approval  of  purchase  and  sale 3  I 

Attorney   for   foreign   corporations ' 

Authority  to  liquidate   bank '36 

Authorized  deposit  of  trust  company  securities 96,  98 

Bond    required    '  2" 

Bulletin  to  be  posted  in  office  of '41 

Certificate  of,  to  be  posted 50 

Certificate  of  bonds  for  savings  banks 61,  61a 

Chief  deputy  of '  2  ' 

Consent  necessary  to   do   departmental  business 23 

Consent  of,   necessary  to   organize  banking   corporation 127 

Consent  of  to  purchase   of  trust  company   stock 37 

Consent  of  to  purchase  safe  deposit  corporation  stock 37 

Copies  of  papers  filed  with 24a 

Corporation  changes,  certificate  of,  filed  with 8 

Designation  of  depositary 20,  43 

Discretion  in  permitting  loans  on  property  encumbered  by  governmental 

liens  5  7a 

Duties  on  closing  bank i3o 

Duties  when  bank  violates  law 134,   135a,   136 

Duties  when  capital  of  bank  impaired 133,  135a,  136 

Employment  of  counsel  by 136 

Foreign  corporations  subject  to  supervision 7 

Inspection  of   court  trusts 101 

Inspection  of  private  trusts 101 

[249] 


BLYTH.  WITTER  &   CO. 


BANK  ACT  OF  CALIFORNIA — Continued 

StTPEEINTENDENT   OF   BANKS — Continued.  Section 

Issuance  of  order  to  show  cause,  when 134 

Investigation  of  bonds  by 61a 

Issuance  of  license  by 127,  128 

Licensing  of  branch  office  discretionary 9 

License  of 127,  128 

Liquidation  by  1  36 

May  appoint  special   deputies 136 

May  authorize  acceptance  of  drafts  and  bill  of  exchange  by  commercial 

banks    80 

May  call  meeting  of  stockholders 135 

May    compromise  pecuniary  penalties  or  forfeitures  imposed 144 

May    enforce    stockholders'    liability    136 

May    examine    national    banks,    when 48 

May    examine   trust   department   of   national   bank 48a 

May    limit  deposit  by  commercial  banks  with  commercial  banks 85 

May    make   extra   examinations   124 

May    require    special    report    130a 

May   renew  certification  of  bonds  without  application,  when 61a 

May    retain   revolving   fund 123 

May    revoke  designation  of  depositary 43 

May    take   possession   of   unsound   bank 136 

Must  make  special  examination  by  order  of  directors 139 

Not  to  be  interested  in  bank 120 

Oath  of  office   120 

Offices  in  San  Francisco  and  Los  Angeles 122 

Official  reports  prima  facie  evidence 142 

Official  seal  of 134 

Powers  of  '  24 

Power  to  examine  foreign  corporations 124 

Receives  copy  of  national  charter  upon  conversion 56a 

Regulation  of  deposits  of  commercial  bank  funds 85 

Reports  of  banks  to 130 

Report  to  governor  140 

Revolving  fund  I  23 

Revokes  license  of  withdrawing  trust  company 102 

Salary  120 

Seal   of,   as   evidence   24a 

Seal   of,    charge   for   affixing   24a 

Seal    of,    may  be  recorded  24a 

Shall  give  notice  of  liquidation  proceedings 136 

Shall  provide  auditor,   when 124 

5pecial   examination  by  '39 

[250] 


INDEX 

BANK  ACT  OF  CALIFORNIA — Continued 

SUPERINTENDENT  OF  BANKS — Continued.  Section 

Supervision  of  foreign  banking  corporations 7 

Supervision   of  trusts  '0' 

To  determine  amount  of  capital  to  be  maintained  by  selling  bank 3  I 

Surplus  and  undivided  profits  not  to  be  advertised  as  an  aggregate 14 

Increased   to   twenty-five  per   cent   of   capital 2  1 

Invested  in  bank  premises,   etc.,   not  available  to   charge  losses 2  1 

Maintained    by    selling    bank 3  I 

Maximum    necessary   to    maintain 2  1 

May  be  converted   into   capital 2  1 

One-tenth  of  net  profits  to  be  added  before  dividend 21 

Paying    losses    from    21 

Re-apportionment    between    departments 23 

Requirements  of  addition  to 2  1 

Taxes,  effect  on  first  lien  on  real  estate 57,  57a 

Teller,  overdraft  prohibited  39 

Timber  Land,  fixing  market  value 61 

Redwood,  loans  on,  by  savings  banks 61 

Title  of  act I 

Title  Insurance  Company,  shall  not  conduct  commercial  or  savings  bank 22,  37 

Transacting  trust  business  shall  have  separate  trust  capital 106 

Trust    department,    application    of    law 107 

Trust  department  subject  to   supervision 107 

Total  Reserves  defined 20 

Town,  assessment  by,   effect  on  first  lien 57,  57a 

Trade  Acceptances,  when  eligible  for  savings  banks 67 

Transmitters  of  Money  to  Foreign  Countries,  annual  report  of 13 

Bond  or  surety  of 13 

Certificate  filed  with  superintendent  of  banks 13 

Deposit  with  state  treasurer 13 

Elxpress    companies   acting   as 13 

Fee  paid  yearly I  3 

Filing  of  annual   report 13 

Penalty   for  unauthorized   operation 13 

Power  of,  when  revoked I  3 

Railroad    companies    acting    as 1  3 

Replacement    of    agents,    notice    of 1 3 

Regulations  for  transmission  of  m,oney  by 13 

Steamship  companies  acting  as 13 

Subject  to  inspection  by  superintendent  of  banks 13 

Travel  and  tourist  copartnerships  acting  as 13 

Trust  deposit  in   trust   for  another 1  5a 

Use  of  word  by  national  bailks 48a 

Use  of  word  by  trust  companies 28 

[251] 


BLYTH,  WITTER  &   CO. 


BANK  ACT  OF  CALIFORNIA— Continued 

Section 

Trust  Company,  additional  deposits  with  treasurer,  when  necessary 98 

Administrators  may   deposit  money  with 91 

Administrators  may   deposit  personal  assets  with 93 

Advertising,    how    regulated 28 

Advertising  as  savings  bank 49 

Articles    of    incorporation 90 

As  member  of  federal  reserve  bank 90 

Bank  may  acquire  stock  of  one 37 

Capital  apportioned  between  court  and  private  trusts 90 

Capital  requirements  90 

Court  trusts  r. 96,  1  0  1 

Court  trust  securities  deposit 96,  98 

Defined  6,  90 

Deposit  of  estate  funds  with 92 

Deposits   of  public   administrator  with 92 

Deposit  of  trust  funds  with 91 

Deposits  with  by   court  order 93 

Deposits  with  state  treasurer 90,  96,  97,    98,  99 

Division  of   trusts   accepted  by I  0  I 

Doing    departmental    business I  06 

Doing    title    insurance   business 22 

Entering  federal  reserve  bank  may  continue  to  administer  and  take  trusts         90 

Exchange  of  securities  deposited  by,  to  be  authorized 96 

Foreign,  may  act  in  certain  capacities 7,  90 

Foreign,  may  have  representative  in  this  state,  when 12c 

Guardian  of  estate  only,  not  person 90 

Interest  paid  by,  on  deposits 95 

Interest  or  dividends  on  securities  deposited 96 

Investments  governed  by  savings  bank  limitations 105 

Investment  of  trust  funds 94 

Knowledge  of  private  trusts   confidential 103 

License  of,  when  surrendered 102 

Liquidation    of    1  36 

May  act  as  executor 6,  90 

May  mortgage  premises  to  state  treasurer,  when 97 

May  resign  as  trustee  under  private  trust,  when I  0  I 

National  banks  operating  as 48a 

Oath,  how  made,  if  required 90 

Operating   title   insurance  business 106,  107 

Powers  of  6 

Prerequisites  before  acting  as 90 

Private   trusts  96,  1 0  I 

Private   trusts,     confidential,     except 101,  103 


[252] 


INDEX _^_ 

BANK  ACT  OF  CALIFORNIA — Continued 

TKUST  COMPANY— Continued.  Section 

Private    trust    securities  deposit  96,  98 

Private    trust    shall   be   deemed   to   be   court   trust,   when 101 

Public   administrator   may   deposit   with 92 

Purchase  by   bank   of   stock   of 37 

Purpose  of  " 

Qualifications    necessary    90 

Revocation   of   certificate   shall    not   affect   trusts 98 

Release    of    when    withdrawing '02 

Reports    of '  0  I 

Responsibility  for  trust  funds 94 

Sale  of,  purchasing  company  subrogated 3  I 

Securities  deposited  may  be   exchanged 96 

Securities  deposited  with  treasurer  to  be  accompanied  by,  what 99 

State  treasurer,  initial   deposit   necessary 90 

Trust   funds,    meaning   of   term 98 

Trusts   classified  '  0  I 

Use  of  term  restricted 12,    12a,  12b 

When  national  banks  may  act  as 48a 

Withdrawing  from   trust  business 102 

Trust  Department,  may  be  maintained  in  separate  building 26 

May  deposit  with  savings  or  commercial  departments 25 

Of  national  bank  subject  to  inspection 48a 

Operated  by  title  insurance  company 106,  107 

Trust   funds   received   by 32 

Trust  Funds,  deposits  of 25 

Interest  on,  as  provided  by  court 95 

Investments,    how    regulated 1 05 

Meaning  of  term 98 

Preference  of  5  I 

Shall  not  be  counted  as  reserve 32 

Shall  not  be  mingled  with  other  assets 32 

Trustee,  deposits  of  money  with  trust  company 91 

Deposits  of  personal  property  with  banks 93 

Deposit  of  trust  funds  by 5  I 

Deposits  with  banks  51 

Foreign  corporations  permitted  to  act  as,  when 7,  90 

Individuals   and   corporations   not   prohibited   from   acting   as   such   under 

deed  of  trust  securing  repayment  of  money 101 

Trust  company  may  act  as;  oath  required 90 

Trusts  classified;  court  and  private 101 

Transfer  of  as  incident  to  purchase  and  sale 3  1 

[253] 


BLYTH,  WITTER  &  CO. 


BANK  ACT  OF  CALIFORNIA— Continued 

Section 
Unclaimed   Deposits,    escheat    of 15 

Publication    of    1 5 

Report  of  1  5 

Undivided  Profits,  one-tenth  to  be  carried  to  surplus  before  dividend 2  I 

United  States,  assessment  by,  effect  as  first  lien 57,  57a 

Bonds  of  available  for  deposit  with  state  treasurer 96 

Bonds   legal  for  savings  bank 61 

Bonds  of,  as  security  for  directors'  loans 65,  83 

Postal   savings   may   be   borrov^ed 62 

Unknown  Depositors,  list  of  and  report 15 

Vacancy  in  office  of  superintendent  of  banks,  duties  of  chief  deputy 121 

Voluntary  liquidation  of  banks 136a,  137 

Window  Signs,  must  indicate  type  of  business  conducted 28 

Withdrawal  of  savings  deposits,   conditions  of 64 

Of  securities  by  trust  company  from  treasurer's  office 96,  102 


[254] 


UC  SOUTHERN  REGIONAL  LIBRARY  FACILITY 


AA    000  784  769    2 


